Press Release|CMBS
View PDF

KBRA Affirms All Outstanding Ratings for COMM 2013-LC13

7 Mar 2025   |   New York

Contacts

KBRA affirms all outstanding ratings for COMM 2013-LC13, a $68.5 million CMBS conduit transaction which has two assets remaining, each of which have been identified as K-LOCs. The affirmations follow a surveillance review of the transaction and are based on the performance and expected recovery of the remaining assets, which have not meaningfully changed since KBRA's last ratings change in February 2025. The transaction has incurred $47.8 million in cumulative principal losses (with adjustments) to date. The realized losses reduced the principal balances of Classes F, and G to zero while the principal balance of Class E has been reduced by $9.9 million (35.1% of its original balance).

As of the February 2025 remittance period, the largest loan is matured non-performing and the second largest is REO. The details of the loan and REO asset are outlined below.

15 MetroTech Center (largest, 83.2%, K-LOC, Matured Non-Performing Balloon)

  • The loan is collateralized by a 649,492 sf, Class-A office building located in downtown Brooklyn, New York. The 19-story property was built in 2003 and offers 243 parking spaces in a below-grade parking garage. The borrower ground leases the land from the City of New York pursuant to a 99-year ground lease that expires in December 2100.
  • KBRA maintains the loan's K-LOC designation due to its transfer to special servicing in July 2023 and its subsequent maturity default in September 2023. The loan status was updated to matured non-performing as of January 2024. The property has suffered from declining occupancy and increased expenses, including a ground lease rent increase in 2023. In addition, the subject's largest tenant, CoNY Human Resources (29.1% of sf) is operating on a MTM basis following its July 2024 lease expiration. Discussions between the landlord and tenant are ongoing.
  • The servicer-reported occupancies and DSCs are: 70.0% / 0.97x (YTD September 2023), 75.0% / 0.81x (FY 2022); at closing these were 97.8% / 1.42x. The subject was reappraised for $144.6 million ($223 per sf) in July 2024, a 47.0% decline from $273.0 million ($423 per sf) at issuance. KBRA 's analysis resulted in an estimated loss of $7.9 million on a whole loan balance of $121.6 million (6.5% estimated loss severity). The loss is based on a distressed liquidation value of $115.8 million ($178 per sf).

Doubletree Midland (2nd largest, 16.8%, K-LOC, REO)

  • The loan is collateralized by a 261-key full-service hotel located in downtown Midland, Texas.
  • KBRA maintains the loan's K-LOC designation based on its REO status. The loan was initially transferred to special servicing in July 2020 for imminent monetary default. In addition, the borrower failed to payoff the loan at its maturity in September 2023. A loan modification was implemented, granting the borrower a forbearance through November 2023. However, the borrower failed to repay the loan by that time. A subsequent modification extended the forbearance period from December 2023 through May 2024. The special servicer's foreclosed in August 2024, and Hilton removed the DoubleTree flag in December 2024. The property is currently operating as an independent hotel while the special servicer negotiates a franchise agreement to reposition the hotel with a recognized brand.
  • The servicer-reported DSCs and occupancies are: 0.94x / 48.0% (YTD March 2024), 1.06x / 49.0% (FY 2023); at closing these were 59.9% / 2.55x. An appraisal dated January 2025 valued the asset at $15.7 million ($60,153 per key), which is 58.1% below the $37.5 million ($143,678 per key) value at issuance. KBRA 's analysis resulted in an estimated loss of $3.2 million (27.5% estimated loss severity) on a whole loan balance of $11.5 million. The loss is based on a distressed liquidation value of $9.3 million ($35,632 per key).

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.

Related Publications

Methodologies

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1008387