Fitch Ratings has affirmed all rated classes of FREMF 2014-K36
multifamily pass-through certificates and three classes of Freddie
Mac structured pass-through certificates, series K-036. A detailed
list of rating actions follows at the end of this press
release.
KEY RATING DRIVERS
The affirmations are due to stable performance of the underlying
pool. No loans have been delinquent or specially serviced since
issuance. As of the January 2015 distribution date, the pool's
aggregate principal balance has been reduced by 0.5% to $1.25
billion. No loans are defeased.
The affirmations of the Freddie Mac structured pass-through
certificates, series K-036 certificates are the result of the
pass-through nature of the certificates, as they are dependent on
the underlying ratings of the corresponding classes of FREMF
2014-K36.
The largest loan in the pool (7.2%) is secured by a 357-unit
mid-rise apartment complex located in San Jose, CA. The property
was built in 2013 and consists of a four-story residential building
over a subterranean parking garage. It is the second phase of a six
phase development. Amenities are shared among all phases and
include: seven saltwater pools and spas, a fitness center with a
spin, yoga and aerobics room, a five-acre park, a clubhouse,
internet cafe, a movie theater with seating for 23, a basketball
court, and two tennis courts. As of September 2014, the debt
service coverage ratio (DSCR) was reported to be 1.82x. And
occupancy was reported to be 96%.
The second largest loan (4.9%) is secured by a 552-unit,
townhome and garden-style apartment complex located in Dublin, OH,
which is roughly 15 miles northwest of the Columbus CBD. The
property was developed in two phases in 2010 and 2013 and is
improved with 53 two- and three-story apartment buildings, a
fitness center, clubhouse/community center with rental office, full
service bar/restaurant, sand volleyball courts, and a swimming
pool. Updated financial information was not available. At issuance,
the occupancy and DSCR was reported to be 91% and 1.27x,
respectively.
The third largest loan (4.4%) is secured by a 528-unit, garden
style and townhome apartment complex located in Carrollton, TX,
which is within the Dallas-Fort Worth MSA. The subject, built in
two phases in 1998 and 2001, is improved with 51 two- and
three-story apartment buildings, clubhouse, fitness center and
maintenance shop building. As of September 2014, the DSCR was
reported to be 1.63x. The occupancy has improved to 95% compared to
92% at issuance.
RATING SENSITIVITIES
The Rating Outlooks remain Stable for all classes due to the
transaction performing in-line with expectations at issuance. Fitch
does not foresee positive or negative ratings migration until a
material economic or asset-level event changes the transaction's
portfolio-level metrics. Additional information on rating
sensitivity is available in the report 'FREMF 2014-K36 Multifamily
Mortgage Pass-Through Certificates and Freddie Mac Structured
Pass-Through Certificates, Series K036' (Feb. 4, 2014), available
at www.fitchratings.com
Fitch affirms the following classes as indicated:
FREMF 2014-K36 Multifamily Mortgage Pass-Through
Certificates
--$188.5 million class A-1 at 'AAAsf', Outlook Stable;
--$865.4 million class A-2 at 'AAAsf', Outlook Stable;
--$1.1 billion* class X1 at 'AAAsf', Outlook Stable;
--$1.1 billion* class X2-A at 'AAAsf', Outlook Stable;
--$69 million class B at 'Asf', Outlook Stable;
--$31.4 million class C at 'BBB+sf', Outlook Stable.
Freddie Mac Structured Pass-Through Certificates, Series
K-036
--$188.5 million class A-1 at 'AAAsf', Outlook Stable;
--$865.4 million class A-2 at 'AAAsf', Outlook Stable;
--$1.1 billion* class X-1 at 'AAAsf', Outlook Stable.
*Notional amount and interest-only.
Of the FREMF 2014-K36 multifamily mortgage pass-through
certificates, Fitch does not rate the interest-only X2-B, interest
only class X3 or the class D certificates.
Of the Freddie Mac Structured Pass-Through Certificates, Series
K-021, Fitch does not rate the interest-only class X3.
A comparison of the transaction's Representations, Warranties,
and Enforcement (RW&E) mechanisms to those of typical RW&Es
for the asset class is available in the following report:
--'FREMF 2014-K36 Multifamily Mortgage Pass-Through Certificates
and Freddie Mac Structured Pass-Through Certificates, Series K-036
- Appendix' (Feb. 4, 2014).
Additional information on Fitch's criteria for analyzing U.S.
CMBS transactions is available in the Dec. 10, 2014 report, 'U.S.
Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria',
which is available at 'www.fitchratings.com' under the following
headers:
Structured Finance >> CMBS >> Criteria Reports
Additional information is available at
'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (Aug. 4,
2014);
--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC
Criteria' (Dec. 10, 2014).
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC
Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=978749
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ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE
ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.
Fitch RatingsPrimary AnalystDaniel AndersonAssociate
Director+1-312-368-2305Fitch Ratings, Inc.70 West Madison
StreetChicago, IL 60602orCommittee ChairpersonMary MacNeillManaging
Director+1-212-908-0785orMedia Relations:Sandro Scenga, New York,
+1 212-908-0278Email: sandro.scenga@fitchratings.com