Fitch Affirms JPMCC 2011-PLSD; Outlooks Revised to Stable

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed all classes of J.P. Morgan Chase Commercial Mortgage Securities Trust 2011-PLSD and the Rating Outlooks on classes D and X-B have been revised to Stable from Negative. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The affirmations are the result of the overall stable collateral performance and positive leasing activity since Fitch's last rating action. Since the last review, several tenants vacated upon lease expirations as anticipated. Subsequent to these vacancies, the borrower has been successful in re-tenanting a sizable portion of the newly available space. Per the February 2016 rent roll, the property was 93% leased, compared to 92% at YE2015 and 93% at Fitch's last review. Fitch expects the rental revenue to increase once the newly executed tenants begin paying rent. The servicer reported YE 2015 debt service coverage ratio (DSCR) was 1.62x, compared to 1.80x at YE2014, 1.67x at YE2013 and 1.85x at issuance.

The loan is secured by 1.94 million square feet (sf) of the 2.26 million sf Palisades Center, a super-regional mall located in West Nyack, NY. The collateral anchors include JC Penney, Burlington Coat Factory, Dick's Sporting Goods, BJ's Wholesale Club, Target, and Home Depot. The shadow anchors, Macy's and Lord & Taylor, own their own spaces and are not part of the collateral. The in-line tenancy consists of over 200 diverse retail and entertainment tenants.

As of trailing 12-month (TTM) second quarter 2015 (2Q15), total mall sales have decreased 1.2% to $588.7 million from $596.1 million at YE2014. Total mall sales at issuance were $643.7 million. Although sales per square foot (psf) for in-line tenants improved slightly to $442 TTM 2Q15 from $439 at YE2014, sales remain lower than $529 psf at issuance.

As part of its review, Fitch analyzed the performance of the loan and its underlying collateral. Fitch modeled cash flow based on the YE2015 operating statement analysis report and YE2015/February 2016 rent rolls. The real estate tax and insurance expenses were based on the actual 2015 tax bill and insurance premium. Fitch stressed the cash flow by excluding revenue from month-to-month leases and several tenants with lease rollover in 2016.

The Fitch stressed DSCR for the loan is 1.39x, compared to 1.40x as modeled at issuance which was based on TTM Sept. 30, 2011 financials. The Fitch stressed loan-to-value ratio is 63.8%, which is based on capitalization of the Fitch-adjusted net cash flow at a rate of 7.75%, compared to 63.3% at issuance.

The certificates are collateralized by a five-year fixed-rate (5.658%) loan that is amortizing on a 30-year schedule. As of the February 2016 remittance report, the current balance of the loan is $353.6 million, reduced 5.6% from $374.6 million at issuance. The loan matures in November 2016. In addition, there is a $150 million mezzanine debt held outside the trust.

RATING SENSITIVITIES

Ratings on all classes are expected to remain stable unless there are significant changes in performance. In 2014, the property benefitted from a large real estate tax reduction after a reassessment. In the event the property is assessed to a higher value in the future, property cash flow could be affected. Fitch will continue to monitor this transaction closely.

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed in relation to this rating action.

Fitch has affirmed the following ratings:

--$4.4 million class A-1 at 'AAAsf'; Outlook Stable;

--$242.9 million class A-2 at 'AAAsf'; Outlook Stable;

--IO class X-A at 'AAAsf'; Outlook Stable;

--IO class X-B at 'BBBsf'; Outlook to Stable from Negative;

--$33.2 million class B at 'AAsf'; Outlook Stable;

--$35.5 million class C at 'Asf'; Outlook Stable;

--$37.6 million class D at 'BBBsf'; Outlook to Stable from Negative.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions (pub. 27 Aug 2015)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=870009

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

Related Research

JPMCC Mortgage Securities Trust 2011-PLSD -- Appendixhttps://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=663334

Additional Disclosures

Dodd-Frank Rating Information Disclosure Formhttps://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1001112

Solicitation Statushttps://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1001112

Endorsement Policyhttps://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160317006234/en/

Fitch Ratings
Primary Analyst:
Amy Gan, +1-212-908-9143
Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson:
Mary MacNeill, +1-212-908-0785
Managing Director
or
Media Relations:
Sandro Scenga, +1-212-908-0278
New York
[email protected]

Source: Fitch Ratings

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