DBRS Morningstar Confirms All Classes of COMM 2014-CCRE18 Mortgage Trust

DBRS Limited (DBRS Morningstar) confirmed all classes of Commercial Mortgage Pass-Through Certificates, Series 2014-CCRE18 issued by COMM 2014-CCRE18 Mortgage Trust as follows:

-- Class A-4 at AAA (sf)
-- Class A-5 at AAA (sf)
-- Class A-M at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class X-A at AAA (sf)
-- Class B at AA (low) (sf)
-- Class C at A (low) (sf)
-- Class PEZ at A (low) (sf)
-- Class X-B at BBB (sf)
-- Class D at BBB (low) (sf)
-- Class E at B (high) (sf)
-- Class F at CCC (sf)

All trends are Stable, with the exception of Class F, which does not carry a trend. Class F is also designated as having Interest in Arrears. In August 2021, the Fairfield Inn Butler loan (Prospectus ID#32) was liquidated from the pool at a loss of $5.3 million to the trust (76% loss severity). DBRS Morningstar had previously analyzed this loan with a loss of $1.6 million (23% loss severity). Although the loan was resolved with a greater than expected loss, the loss was still absorbed by the nonrated Class G, although this class has now been written down by over 78% as a result of losses upon the liquidations of three loans.

The rating confirmations reflect the current credit outlook on the remaining collateral. At issuance, the transaction consisted of 49 loans with an original trust balance of $996 million. As of the December 2021 remittance report, 37 loans remained in the transaction with a current trust balance of $702 million, representing a collateral reduction of approximately 29.5% since issuance. Seven loans, totalling 14.3% of the pool, are fully defeased. Five loans, representing 4.2% of the pool, are in special servicing while six loans, representing 16.8% of the pool, are being monitored on the servicer’s watchlist.

The largest loan in special servicing is Westbrook Plaza (Prospectus ID#22, 2.0% of the pool), which was transferred to special servicing in July 2020 because of monetary default. The most recent financials provided by the servicer were as of September 2020, when occupancy was reported at 100% and the debt service coverage ratio (DSCR) for the trailing nine months ended September 30, 2020, was reported at 1.11 times (x). Per the latest updates from the special servicer, the borrower and special servicer are finalizing terms of a forbearance and the loan is expected to return to the master servicer during the first half of 2022. The subject is anchored by Saigon Supermarket (59.0% of net rentable area (NRA); lease expires May 2024). No other tenant occupies more than 4% of the leasable space.

399 Thornall Street (Prospectus ID#8, 4.8% of the pool) was added to the servicer’s watchlist in 2017 because of sustained low occupancy below 80%. Occupancy fell to as low as 39.0% in September 2020 after the property’s former largest tenant, Daiichi Sankyo (originally 57.9% of NRA), downsized its space in 2018, now occupying 7.2% of NRA. Per the September 2021 rent roll, the property was 53.5% occupied, primarily because of the additions of Hackensack Meridian Health (14.0% of NRA; lease expires September 2028) and Mazars USA (7.0% of NRA; lease expires July 2023) in 2020. Although occupancy remains below historical levels, the loan is performing well compared with 2020, as the DSCR for the six months ended June 30, 2021, was reported at 1.81x while the DSCR for YE2020 was reported at 0.44x.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/373262.

Classes X-A and X-B are interest-only (IO) certificates that reference a single rated tranche or multiple rated tranches. The IO rating mirrors the lowest-rated applicable reference obligation tranche adjusted upward by one notch if senior in the waterfall.

All ratings are subject to surveillance, which could result in ratings being upgraded, downgraded, placed under review, confirmed, or discontinued by DBRS Morningstar.

DBRS Morningstar provides updated analysis and in-depth commentary in the DBRS Viewpoint platform for the following loans in the transaction:

-- Prospectus ID#8 – 399 Thornall Street (4.8% of the pool).
-- Prospectus ID#22 – Westbrook Plaza (2.0% of the pool)

For complimentary access to this content, please register for the DBRS Viewpoint platform at www.viewpoint.dbrsmorningstar.com. The platform includes issuer and servicer data for most outstanding CMBS transactions (including non-DBRS Morningstar rated), as well as loan-level and transaction-level commentary for most DBRS Morningstar-rated and -monitored transactions.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is North American CMBS Surveillance Methodology (March 26, 2021), which can be found on dbrsmorningstar.com under Methodologies & Criteria. For a list of the structured-finance-related methodologies that may be used during the rating process, please see the DBRS Morningstar Global Structured Finance Related Methodologies document, which can be found on dbrsmorningstar.com in the Commentary tab under Regulatory Affairs. Please note that not every related methodology listed under a principal structured finance asset class methodology may be used to rate or monitor an individual structured finance or debt obligation.

The DBRS Morningstar Sovereign group releases baseline macroeconomic scenarios for rated sovereigns. DBRS Morningstar analysis considered impacts consistent with the baseline scenarios as set forth in the following report: https://www.dbrsmorningstar.com/research/384482/baseline-macroeconomic-scenarios-application-to-credit-ratings.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at info@dbrsmorningstar.com.

The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the rating process. Please note a sensitivity analysis is not performed for CMBS bonds rated CCC or lower. The DBRS Morningstar long-term rating scale definition indicates that ratings of CCC or lower are assigned when the bond is highly likely to default or default is imminent, thereby prevailing over a sensitivity analysis.

For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com.

DBRS Limited
DBRS Tower, 181 University Avenue, Suite 700
Toronto, ON M5H 3M7 Canada
Tel. +1 416 593-5577