Fitch Ratings has downgraded three classes of the COMM 2012-CCRE2, citing its exposure to two regional shopping malls in Chicago and Albany, N.Y.
The downgrades involve the performance of notes collateralized by Chicago Ridge Mall and the Crossgates Mall in Albany, which represent a combined exposure of 13.7% of the pool.
Fitch said that it performed a paydown scenario assuming that the two regional malls were the last remaining loans in the pool. Despite relatively stable performances for the majority of the pool since the previous rating action, Fitch said, it was concerned about the pool’s high exposure to the two loans.
Chicago Ridge Mall represents the largest contributor to the losses, 7.8%. Star-West JV LLC sponsored the loan. Collateral occupancy had improved to 80% as in September 2021, compared with 70.2% in December 2020. The largest tenants include a non-collateral Kohl’s anchor, Dick’s Sporting Goods, Bed Bath & Beyond, AMC, H&M, Michael’s and Aldi, Fitch said.
Fitch noted that sales for in-line tenants with less than 10,000 square feet of selling space, excluding food court and restaurant tenants, fell to $387 per square foot for the 12-month (TTM) period up to September 2020, compared with $492 psf for the TTM September 2019.
The loan on the Crossgates Mall in Albany represented the next largest contributor to losses in the pool, at 5.9%, Fitch said. The loan had been transferred to special servicing in April 2020, for imminent default. Pyramid Group, the loan’s sponsor, was granted a six-month forbearance in May 2020, and was returned to the master servicer in June 2021, as a corrected mortgage loan. Repayments were to resume in January 2021. Further relief was provided through the maturity extension and the deferred debt service repayment was deferred until the extended maturity date, the rating agency said.
JCPenney, Regal Cinemas/IMAX, Dick’s Sporting Goods and Burlington Coat Factory are among the largest collateral tenants, Fitch said.
