Fitch Ratings has downgraded 13 classes of Greenwich Capital Commercial Funding Corp. 2007-GG11, commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this release.
The downgrades reflect an increase in Fitch expected losses across the pool. Fitch modeled losses of 15.4% of the remaining pool; expected losses of the original pool are now 16.3% compared to 11.15% at the last review. Fitch has designated 56 loans (49.8%) as Fitch Loans of Concern, which includes 11 specially serviced loans (15.3%). Fitch expects classes D thru S may be fully depleted from losses associated with the specially serviced assets and class C may also be impaired.
As of the February 2012 distribution date, the pool's aggregate principal balance has been paid down by approximately 3% to $2.61 billion from $2.69 billion at issuance. Interest shortfalls are affecting classes E thru S.
The largest contributors to loss across the transaction are Bush Terminal, Diamond Run Mall and Clearwater House.
The Bush Terminal loan transferred to special servicing in January 2011 for payment default. The loan is collateralized by a 6 million square foot (sf) industrial warehouse development located in Brooklyn, NY. The purpose of this loan was to help fund the re-development of the property and convert a portion of the space from industrial to office (690,000 sf) and loft/showroom space (2.5 million sf) in order to achieve higher rents. Occupancy at the property has been gradually declining to 66% by August 2011 from 87.2% at issuance, which partly reflects space being kept vacant for conversion. As part of the conversion plan, $25 million was reserved at origination. As of February 2011, approximately $14.4 million remains available in this reserve. The borrowers received approximately $100 million in equity cash-out at issuance, net of reserves. A recent valuation of the property implies significant losses.
The Diamond Run Mall loan is secured by a regional mall with 383,987 sf in Rutland, VT. The loan transferred to special servicing in May 2010 for payment default. The property is one of only three malls in Vermont and the only mall in Rutland County. The mall is anchored by JC Penney, Sears and Kmart. Property performance has deteriorated as a result of higher vacancy and higher expenses relative to issuance. Occupancy dropped to 82% as of June 2011 from 91.5% at YE 2008 and 92.8% at issuance. The servicer-reported DSCR for June 2011 was 0.45 times (x) down from 1.20x at issuance.
The Clearwater House loan is secured by a 10-story 105,583-sf office building located in Stamford, CT. The property was built in 1985. The property is located less than 1/2 mile from the train station and I-95. This loan transferred to the special servicer in May 2010 for imminent default. Since that time, a new sponsor, Ascent Real Estate Advisors, has gained control of the property by foreclosing on mezzanine debt. The special servicer is in discussions with the sponsor regarding a modification while also pursuing foreclosure. Occupancy as of the April 2011 was approximately 61%. The property was 100% leased at June 30, 2009, however, the largest tenant, Pimco (Allianz), had leased but not fully occupied 29% of the NRA. Pimco did not renew its lease upon expiration in the third quarter of 2010. The most recent servicer-reported DSCR was 0.27x based on the annualized April 30, 2011 financials.
Fitch has downgraded, removed from Rating Watch Negative and assigned Rating Outlooks or recovery estimates to the following classes:
--$268.7 million class A-M to 'BBBsf' from 'AAAsf'; Outlook Negative;
--$211.6 million class A-J to 'CCCsf/RE100%' from 'BBsf';
--$20.2 million class B at to 'CCCsf/RE45%' from 'Bsf';
--$26.9 million class C to 'CCsf/RE0%' from 'B-sf'.
Fitch has downgraded and revised the recovery estimates for the following classes:
--$20.2 million class D to 'CCsf' from 'CCCsf'; RE to 0% from 100%;
--$33.6 million class E to 'CCsf' from 'CCCsf'; RE to 0% from 100%;
--$13.4 million class F to 'Csf' from 'CCCsf'; RE to 0% from 100%;
--$33.6 million class G to 'Csf' from 'CCCsf'; RE to 0% from 100%;
--$23.5 million class H to 'Csf' from 'CCCsf'; RE to 0% from 100%;
--$26.9 million class J to 'Csf' from 'CCsf'; RE to 0% from 40%;
--$36.9 million class K to 'Csf' from 'CCsf'; RE to 0% from 5%;
--$6.7 million class L to 'Csf' from 'CCsf'; RE to 0% from 5%;
--$10.1 million class M to 'Csf' from 'CCsf'; RE to 0% from 5%.
Fitch has affirmed the following classes:
--$40.8 million class A-1 at 'AAAsf'; Outlook Stable;
--$505.3 million class A-2 at 'AAAsf; Outlook Stable;
--$37.4 million class A-3 at 'AAAsf'; Outlook Stable;
--$47 million class A-AB at 'AAAsf'; Outlook Stable;
--$995.6 million class A-4 at 'AAAsf'; Outlook Stable;
--$249.8 million class A-1-A at 'AAAsf; Outlook Stable;
--$10.1 million class N at 'C/RE0%';
--$6.7 million class O at 'C/RE0%';
--$3.4 million class P at 'C/RE0%';
--$6.7 million class Q at 'C/RE0%'.
Fitch does not rate the $11.6 million class S. Fitch withdrew the ratings of the interest only class XP and XC. (For additional information, see 'Fitch Revises Practice for Rating IO & Pre-Payment Related Structured Finance Securities', dated June 23, 2010.)
Additional information on Fitch's amended criteria for analyzing U.S. fixed rate CMBS is available in the Dec. 21, 2011 report, 'Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions,' which is available at 'www.fitchratings.com' under the following headers:
Structured Finance >> CMBS >> Criteria Reports
Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions' (Dec. 21, 2011);
--'Global Structured Finance Rating Criteria' (Aug. 4, 2011).
Applicable Criteria and Related Research:
Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions
Global Structured Finance Rating Criteria