Fitch Upgrades One Class and Affirms 12 Classes of GMAC 2004-C3

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has upgraded one class and affirmed 12 classes of GMAC Commercial Mortgage Securities, Inc., series 2004-C3, commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrade of class D is due to higher credit enhancement and lower overall loss expectations.

The transaction has experienced 94.6% of collateral reduction since issuance, which includes $84 million (6.7% of the original pool balance) in realized losses to date. There are five loans remaining in the pool, one of which (14.3% of pool balance) is specially serviced. The largest loan represents 63.7% of the pool. The remaining four performing loans' maturity dates are in 2019 (67.1%), 2024 (15.4%) and 2026 (3.2%). Due to the risks associated with the significant concentrations within the pool, as well as some concerns with tenant rollover related to the largest loan, Fitch's ratings applied additional stresses in its analysis. In addition, a rating cap was applied to class B due to the potential volatility of future performance and possibility of interest shortfalls. No loans are defeased. Interest shortfalls currently reach up to class E.

The specially serviced asset is an 112,899 square foot (sf) anchored retail property in Coconut Creek, FL. Major tenants at the property include Planet Fitness (21.1% of the NRA) and USPS (13.1% of the NRA). The property is currently 54.2% occupied. The property was well-occupied until 2006, when Winn-Dixie left the center. The former Winn-Dixie space was backfilled by Staples and Ace Hardware, however, both of these tenants eventually vacated. Planet Fitness moved into the former Ace Hardware space in 2015. The former Staples space, which has not been occupied since January 2015, remains vacant. The loan transferred to special servicing in August 2011 and has been real-estate-owned since January 2014. The special servicer is working to stabilize the asset and has recently recommended that it be marketed for sale.

The largest loan in the pool is secured by a 452,000 sf office property in Norwalk, CA, which is mainly occupied by government tenants. Year-end 2015 occupancy was 92.4%, which represents a 20 basis point decline year-over-year. It was noted at last review that leases representing 19.6% of the NRA had expired or would expire within 12 months and that two large tenants appeared to be on month-to-month leases. Approximately 18.7% of the aforementioned NRA now reflects new leases, and property level occupancy has remained stable. Fitch will continue to monitor this loan for rollover risk prior to its November 2019 maturity.

RATING SENSITIVITIES

Rating Outlooks on classes B, C, and D are Stable as no additional rating changes are expected; while there is increasing credit enhancement from continued paydown, loan concentration and adverse selection remain a concern including a risk of interest shortfalls. A downgrade to classes E may occur as losses are realized.

DUE DILIGENCE USAGE

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

Fitch upgrades the following classes and assigns Rating Outlooks as indicated:

--$20.3 million class D to 'Bsf' from 'CCCsf'; Outlook Stable assigned.

In addition, Fitch affirms the following classes:

--$15.2 million class B at 'Asf'; Outlook Stable;

--$14.1 million class C at 'BBsf'; Outlook Stable;

--$12.5 million class E at 'Csf'; RE 90%;

--$5.1 million class F at 'Dsf'; RE 0%;

--$0 class G at 'Dsf'; RE 0%;

--$0 class H at 'Dsf'; RE 0%;

--$0 class J at 'Dsf'; RE 0%;

--$0 class K at 'Dsf'; RE 0%;

--$0 class L at 'Dsf'; RE 0%;

--$0 class M at 'Dsf'; RE 0%;

--$0 class N at 'Dsf'; RE 0%;

--$0 class O at 'Dsf'; RE 0%.

The class A-1, A-1A, A-2, A-3, A-4, A-AB, A-5 and A-J certificates have been paid in full. Fitch does not rate the class P certificate. Fitch withdrew the ratings on the interest-only class X-1 and X-2 certificates.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

Criteria for Rating Caps and Limitations in Global Structured Finance Transactions (pub. 28 May 2014)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748781

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

U.S. and Canadian Fixed-Rate Multiborrower CMBS Surveillance and U.S. Re-REMIC Criteria (pub. 13 Nov 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=873395

Additional Disclosures

Dodd-Frank Rating Information Disclosure Formhttps://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1005196

Solicitation Statushttps://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1005196

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/20160526006349/en/

Fitch Ratings
Primary Analyst:
David Ro, +1-312-368-3132
Director
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
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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