Fitch Affirms WFRBS 2014-C24

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings affirms 16 classes of Wells Fargo Commercial Mortgage Securities Inc.'s WFRBS Commercial Mortgage Trust Series 2014-C24 commercial mortgage pass-through certificates. A full list of rating actions follows at the end of this ratings action commentary.

KEY RATING DRIVERS

The affirmations are due to the overall stable performance of the underlying collateral pool. Fitch reviewed the most recently available financial performance data for the transaction, as well as updated rent rolls for the majority of the top 15 loans, which represent 52% of the transaction.

As of the October 2015 distribution date, the pool's aggregate principal balance has been reduced by 3.5% to $1.23 billion from $1.27 billion at issuance.

The largest loan in the pool, St. Johns Town Center (9.6% of the pool), is secured by a 1.4 million square foot ([sf] 981,751 sf collateral) regional outdoor mall located in Jacksonville, FL. The property is anchored by Nordstrom, Dick's Sporting Goods, Dillard's (non-collateral), Target (non-collateral), and Ashley Furniture (non-collateral). Major tenants include Jo-Ann Fabrics, Ross Dress for Less, and DSW Shoe Warehouse. In-line tenants include Barnes & Noble, Staples, PetSmart, Old Navy, Pottery Barn, Urban Outfitters, and Apple. The property continues to exhibit stable performance with total mall occupancy of 98% as of June 2015. There is approximately 22% upcoming rollover in 2016. In-line sales at the mall remain strong at approximately $555 per square foot (psf) excluding Apple. The most recent servicer reported debt service coverage ratio (DSCR) as of June 2015 is 4.23x.

The second largest loan in the pool, Two Westlake Park (8.4%), is secured by a class A, 454,843 sf office property located in downtown Houston, TX, within Houston's Energy Corridor. The two largest tenants are ConocoPhillips and BP. At issuance, BP was trying to sublease a portion of its space (67,334 sf) that was dark. The property remains 100% leased and 85% occupied as of June 2015 with average rent $21 psf. Per REIS as of second quarter 2015 (2Q15), the West/Katy Fwy submarket vacancy is 18.2% with average asking rent $27 psf.

The largest loan on the master servicer's watchlist is Paradise Park (0.8% of the pool) secured by a 443 site age-restricted (55+) manufactured home community located in Pharr, TX. Property amenities include a clubhouse, library, billiards, swimming pool, horseshoes and shuffleboard. A major attraction for property residents is the Tierra Del Sol public golf course, an 18-hole facility, located within close proximity to the property. The property's occupancy declined to 87% as of June 2015 from 92% at issuance. The most recently reported DSCR as of June 2015 is 0.38x. Per the master servicer, the underwritten figures reflect two very large seasonal payments as most of the tenants are seasonal and pay rent on an annual basis in either the spring or the fall; therefore, performance will not increase until these payments are paid. However, at issuance, a seasonal reserve was required so that beginning every April, excess cash flow is trapped until $600,000 is accumulated in the reserve.

RATING SENSITIVITIES

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 'WFRBS Commercial Mortgage Trust, series 2014-C22' (Sept. 2, 2014) available at www.fitchratings.com.

DUE DILIGENCE USAGE

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

Fitch has affirmed the following ratings:

--$30.2 million class A-1 at 'AAAsf'; Outlook Stable;

--$55.3 million class A-2 at 'AAAsf'; Outlook Stable;

--$86.3 million class A-3 at 'AAAsf'; Outlook Stable;

--$240 million class A-4 at 'AAAsf'; Outlook Stable;

--$286.3 million class A-5 at 'AAAsf'; Outlook Stable;

--$59.2 million class A-SB at 'AAAsf'; Outlook Stable;

--$99.2 million class A-S at 'AAAsf'; Outlook Stable;

--Interest-only class X-A at 'AAAsf'; Outlook Stable;

--Interest-only class X-C at 'BB-sf; Outlook Stable:

--Interest-only class X-D at 'B-sf'; Outlook Stable;

--$44.9 million class B at 'AA-sf'; Outlook Stable;

--$32.6 million class C at 'A-sf'; Outlook Stable;

--$176.7 million class PEX at 'A-sf'; Outlook Stable;

--$72 million class D at 'BBB-sf'; Outlook Stable;

--$25.8 million class E at 'BB-sf'; Outlook Stable;

--$10.9 million class F at 'B-sf'; Outlook Stable.

Fitch does not rate the class X-B, X-E, G, SJ-A, SJ-B, SJ-C and SJ-D certificates.

Additional information is available at www.fitchratings.com.

Applicable Criteria

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

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria (pub. 10 Dec 2014)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608

Related Research

WFRBS Commercial Mortgage Trust 2014-C24 -- Appendixhttps://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=800830

Additional Disclosures

Dodd-Frank Rating Information Disclosure Formhttps://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=993108

Solicitation Statushttps://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=993108

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/20151029006396/en/

Fitch Ratings
Primary Analyst:
Lisa Cook, +1-212-908-0665
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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