Fitch Upgrades Two and Affirms 11 Classes of GMAC 2004-C3

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has upgraded two classes of GMAC Commercial Mortgage Securities, Inc., series 2004-C3, commercial mortgage pass-through certificates and affirmed 11 others. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrades follow increased subordination to the first pay class attributed to the repayment of loans since Fitch's last rating action, while the affirmations reflect the otherwise stable performance of the pool.

Fitch modelled losses of 10.9% of the remaining pool; expected losses on the original pool balance total 7.5%, including $85.9 million (6.9% of the original pool balance) in realized losses to date. The transaction has experienced 94.5% of collateral reduction since issuance. There are five loans remaining in the pool; Fitch has designated three of them Fitch Loans of Concern, which includes largest loan in the pool as well as the sole specially serviced asset. To date, realized losses have depleted the original balances of classes G through P and further reduced the original principal balance of class F by 66.8%. Interest shortfalls currently reach up to class E.

The largest contributor to expected losses is a 112,899 square foot (sf) anchored retail property in Coconut Creek, FL. The subject had historically been well occupied until 2006 when Winn-Dixie left the center, with Staples and Ace Hardware backfilling the Winn-Dixie space. Both Ace Hardware and Staples have since closed, and the property is currently 51.9% occupied. Major tenants at the property include the newly signed tenant Planet Fitness (21.1% of the NRA) and USPS (13.1% of the NRA), which recently renewed its lease. 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, which is not currently listed for sale.

Fitch will also continue to monitor the largest loan in the pool, which is secured by a 452,000 sf office property in Norwalk, CA. The property is currently 92.6% occupied, mainly by GSA tenants. According to the most recent rent roll, leases representing 19.6% of the NRA have already expired or will expire in the 12 months and two large tenants appear to be on month-to-month leases. As of the June 2015 remittance, the loan had a total of $1.3 million available in reserves.

RATING SENSITIVITIES

Rating Outlooks on classes B and C 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. Additional downgrades to classes D and E may occur as losses are realized.

Fitch upgrades the following classes and assigns Rating Outlooks and Recovery Estimates (RE) as indicated:

--$16.8 million class B to 'Asf' from 'BBBsf', Outlook Stable;

--$20.3 million class D to 'CCCsf' from 'CCsf', RE 100%.

In addition, Fitch affirms the following classes:

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

--$12.5 million class E at 'Csf', RE 50%;

--$5.2 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

Global Structured Finance Rating Criteria (pub. 31 Mar 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864268

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

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=987000

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=987000

Endorsement Policy

https://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/20150625006325/en/

Fitch Ratings, Inc.
Primary Analyst
R. Brook Sutherland
Senior Director
+1-312 606 2346
Fitch Ratings, Inc.
70 W. Madison St.
Chicago, IL 60602
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Media Relations
Sandro Scenga, +1-212-908-0278
[email protected]

Source: Fitch Ratings

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