Press Release|CMBS

KBRA Downgrades Three Ratings and Affirms All Other Ratings for GSMS 2013-GC13

2 May 2025 | New York

KBRA downgrades the ratings of three classes of certificates and affirms all other outstanding ratings for GSMS 2013-GC13, a $333.0 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction, which has exhibited an increase in estimated losses for the remaining five loans since KBRA's last rating change in May 2021. All remaining loans are K-LOCs and are discussed below.

Mall St. Matthews (largest, 28.9%, K-LOC)

The loan is collateralized by 670,376 sf of a 1.0 million sf, single-level regional mall located in Louisville, Kentucky, approximately seven miles east of the city’s CBD. The property, which is owned and operated by Brookfield Property Partners, has three anchors, Dillard’s, Dillard’s Men’s & Home, and JCPenney. Dillard’s owns its stores and the underlying land and JCPenney owns its improvements subject to a ground lease with the sponsor.
KBRA maintains the loan's K-LOC designation and KPO of Underperform based on a loan modification that was signed in March 2022 converting the loan to interest-only payments and extending its maturity until June 2025. The modification included a $7.0 million contribution of new capital from the borrower along with cash management going towards the reduction of the outstanding principal of the loan. The loan is also subject to a capital event waterfall that upon loan pay off would result in a minimum balance of $75.0 million to be repaid to the lender followed by additional capital event tiers between the lender and borrower.
According to the December 2024 rent roll, the subject property was 93.7% leased compared to 91.2% at last review and 95.8% at closing. Tenant rollover risk remains a concern as lease rollover exceeds 10.0% of base rent in MTM/2025 (21.5%), 2026 (17.3%), 2027 (13.1%) and 2028 (16.2%). There are currently 20 tenants, representing 21.5% of base rent, on MTM leases or which have leases expiring in 2025.
The servicer-reported occupancies and DSCs are: 92.0% / 1.54x (FY 2024); 94.0% / 1.51x (FY 2023); at closing these were 96.0% / 1.96x. An appraisal dated August 2021 valued the asset at $83.0 million ($124 per sf), which is 70.4% below the $280.0 million ($418 per sf) value at issuance. As of April 2025, the loan is current on payments and not specially serviced. However, in the event of a default, KBRA estimates that it could experience a loss given default of $44.9 million (36.7% estimated loss severity) on the whole loan balance of $122.3 million. The loss is based on a KBRA liquidation value of $77.4 million ($74 per sf). The value is derived from a direct capitalization approach using a KNCF of $11.6 million and a capitalization rate of 15.00%.

Plaza America Towers III & IV (2nd largest, 23.9%, K-LOC)

The loan is collateralized by two Class-A office towers totaling 469,071 sf that are located in Reston, Virginia, approximately 20 miles northwest of Washington, DC.
KBRA maintains the loan's K-LOC designation and KPO of Underperform based on declining collateral performance and the borrower’s failure to pay off the loan at maturity. An extension was executed for both the senior and non-trust mezzanine debt until July 2025.
According to the September 2024 rent roll, the subject property was 64.3% occupied, down from 85.3% at last review and 94.6% at closing. Tenant rollover risk remains a concern as tenants representing 44.7% of base rent are scheduled to expire in 2025, including the largest (Science Applications International Corporation, 35.2% of base rent) and the fifth largest (Cambium Assessment, Inc., 7.8%).
The servicer-reported occupancies and DSCs are: 64.0% / 1.14x (TTM Sept 2024); 64.0% / 1.27x (FY 2023); at closing these were 95.0% / 1.56x. An appraisal dated June 2023 valued the asset at $80.0 million ($171 per sf), which is 52.1% below the $167.0 million ($356 per sf) value at issuance. As of April 2025, the loan is current on payments and not specially serviced. However, in the event of a default, KBRA estimates that it could experience a loss given default of $26.8 million (33.6% estimated loss severity) on the whole loan balance of $79.7 million. The loss is based on a KBRA liquidation value of $54.3 million ($116 per sf). The value is derived from a direct capitalization approach using a KNCF of $5.4 million and a capitalization rate of 10.00%.

Crossroads Center (3rd largest, 21.3%, K-LOC)

The loan is collateralized by a 766,213 sf portion of Crossroads Center, an 895,488 sf, single-level regional mall located in St. Cloud, Minnesota, approximately 65 miles northwest of the Minneapolis CBD. The sponsor is Brookfield Property Partners. The mall is anchored by JCPenney, Macy’s, Scheels, and Target. Target owns its store and the underlying land and is not part of the loan collateral.
KBRA maintains the loan's K-LOC designation and KPO of Underperform based on its status with the special servicer, delinquency, and the borrower’s failure to pay off the loan at its scheduled April 2023 maturity. In April 2024, a loan modification was executed extending the loan’s maturity 36 months until May 2027.
According to the September 2024 rent roll, the subject property was 91.3% leased, compared to 85.0% at last review and 96.0% at closing; however, in-line occupancy is 73.8%. Tenant rollover risk remains a concern as lease rollover exceeds 10.0% of base rent in MTM/2025 (26.3%), 2026 (18.9%) and 2029 (25.6%). There are currently 45 tenants, representing 26.3% of base rent, on MTM leases or have leases expiring in 2025, the largest of which, American Eagle Outfitters, represents 3.4% of base rent.
The servicer-reported occupancies and DSCs are: 86.0% / 2.03x (YTD Sept 2024); 83.0% / 1.11x (TTM June 2023); at closing these were 96.0% / 1.89x. An appraisal dated September 2023 valued the asset at $53.0 million ($69 per sf), which is 67.9% below the $165.0 million ($215 per sf) value at issuance. As of April 2025, the loan is current on payments and not specially serviced. However, in the event of a default, KBRA estimates that it could experience a loss given default of $30.1 million (42.4% estimated loss severity) on the whole loan balance of $71.0 million. The loss is based on a KBRA liquidation value of $40.9 million ($53 per sf). The value is derived from a direct capitalization approach using a KNCF of $6.1 million and a capitalization rate of 15.00%.

Holiday Inn - 6th Avenue (4th largest, 21.0%, K-LOC)

The loan is collateralized by a 24-story, 226-key, full-service hotel located in the Chelsea neighborhood of Manhattan six blocks from Madison Square Garden and Penn Station.
KBRA maintains the loan's K-LOC designation and KPO of Underperform based on declining collateral performance and the borrower’s failure to pay off the loan at its June 2023 maturity. In May 2022, the subject was sold for $80.3 million ($355,310 per key) and the loan was assumed by Brookfield Asset Management. The lender granted a maturity extension until June 2025 to give the borrower time to complete ongoing PIP work.
An updated January 2022 appraisal valued the property at $81.4 million ($360,177/key), a 28.3% decrease from issuance. The servicer-reported occupancies and DSCs are: 89.0% / 1.22x (FY 2024); 75.0% / 0.66x (FY 2023); at closing these were 91.0% / 1.79x. As of April 2025, the loan is current on payments and not specially serviced. However, in the event of a default, KBRA estimates that it could experience a loss given default of $13.8 million (19.7% estimated loss severity) on the whole loan balance of $70.0 million. The loss is based on a KBRA liquidation value of $56.3 million ($248,894 per key). The value is based on a distressed non-stabilized disposition of the asset and takes into account comparable market values.

643-647 Ninth Avenue (5th largest, 4.8%, REO)

The asset is collateralized by a mixed-use property composed of 24 multifamily units and 9,337 sf of retail space located in New York, New York.
KBRA maintains the asset's K-LOC designation based on its REO status. The loan transferred to the special servicer in June 2020 for maturity default and the title was taken in January 2023. The retail space had been vacant since 2020; however, a new 10-year lease for 2,972 sf commenced in February 2025. While the mixed-use property also generates revenue from the 24 multifamily units, the loss of the commercial retail revenue resulted in a decline in financial performance and the DSCR fell below breakeven. According to the February 2025 rent roll, the property is 84.6% leased, compared to 75.0% at last review.
The servicer-reported occupancies and DSCs are: N/A / 0.53x (YTD Sept 2024); 77.0% / 0.72x (FY 2023); at closing these were 100% / 1.78x. An appraisal dated May 2024 valued the asset at $16.4 million, which is 37.9% below the $26.4 million value at issuance. As a result, the asset carries an ARA of $6.1 million, resulting in a cumulative ASER of $597,255. KBRA’s analysis resulted in an estimated loss of $8.8 million on the $16.0 million loan balance (54.9% estimated loss severity). The loss is based on a KBRA liquidation value of $11.7 million ($451,510 per unit). The value is derived from a direct capitalization approach using a KNCF of approximately $877,000 and a capitalization rate of 7.47%.

Details concerning the classes with rating changes are as follows:

Class B to A- (sf) from A+ (sf)
Class C to BB (sf) from BBB (sf)
Class PEZ to BB (sf) from BBB (sf)

Rating Sensitivities

Future rating actions will be dependent upon the ongoing assessment of the timing and likelihood of ultimate payment of principal and accrued interest on the rated certificates. The assessment will consider the expected and actual losses on the remaining assets in the transaction, as well as, the magnitude and extent of interest shortfalls, if any, on the certificates.

To access ratings and relevant documents, click here.

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CMBS: GSMS 2013-GC13 Pre-Sale Report

KBRA Downgrades Three Ratings and Affirms All Other Ratings for GSMS 2013-GC13

Rating Sensitivities

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Methodologies