A CMBS deal called COMM 2010-C1 is currently in the market. The sequential-structure is backed by a pool of 42 commercial mortgages secured by 63 properties, according to a Fitch Ratings presale report.
Fitch said that the transaction is characterized by the presence of nontraditional property types. The rating agency's analysis, as a result, takes into account the nontraditional nature of these property types.
The pool's largest loan, Fashion Outlets of Niagara Falls (14.3%), is a factory outlet center located in Niagara Falls, NY.
Meanwhile, Fitch said that the second largest loan is Scottsdale Quarter (8.2%), which is backed by 14.5 acres of land leased to a high-end mixed-use retail center in Scottsdale, AZ.
The Scottsdale Quarter loan has a Fitch-stressed LTV of 109.6%, the rating agency said. This LTV is based on income from the ground lease payment capped at 8.50%. The ground lease payment is the sole source of cash flow that is available to pay debt service at closing. But, in the event of a default on the ground lease payment, the ground lessor can foreclose on the improvements, a recently constructed high-end mixed-use retail center, which Fitch said would offer material added value.