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

NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigned its final ratings to the COMM 2013-GAM transaction, a $324.0 million CMBS single borrower transaction. Concurrently, we have withdrawn our preliminary ratings on the certificates, which were assigned on March 7, 2013.

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 1.8 million square feet (sf) of Green Acres Mall located in Valley Stream, New York. The property is a super-regional mall 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 property is currently 95.3% occupied. The center was initially constructed in 1956 and has undergone several renovations over the years. The most recent renovation occurred in 2010, when the second floor of the Macy’s Men’s/Furniture Gallery store was converted to a Kohl’s. Green Acres Mall was purchased by Macerich in January 2013 from Vornado Realty Trust. 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.

Final 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
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

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.