DBRS Upgrades Class B of FREMF 2011-K11 Mortgage Trust, Series 2011-K11

DBRS Limited (DBRS) has today upgraded the Class B Multifamily Mortgage Pass-Through Certificates Series 2011-K11 issued by FREMF 2011-K11 Mortgage Trust, Series 2011-K11 (the Trust) to AA (sf) with a Stable trend from A (high) (sf).

The rating upgrade to Class B reflects the increased credit support to the bond as a result of the overall performance of the transaction. As of the February 2017 remittance, there has been a collateral reduction of 9.9% since issuance, with 75 of the original 76 loans outstanding, totalling a current trust balance of $1.1 billion. Since issuance, 18 loans representing 20.0% of the pool balance have been fully defeased. Based on the most recent year-end reporting for the loans, the pool reported a weighted-average (WA) debt service coverage ratio (DSCR) of 1.90 times (x) and a WA debt yield of 12.5%, which are improvements over the DBRS issuance figures of 1.40x and 8.8%, respectively. Excluding the defeased loans, 61.7% of the pool is reporting year-to-date 2016 figures, with a WA DSCR and WA debt yield of 1.98x and 13.2%, respectively.

As of the February 2017 remittance, there are four loans on the servicer’s watchlist, representing 6.5% of the pool balance. Two loans were flagged for non-performance-related items limited to deferred maintenance. One loan was flagged because of a fire; however, insurance proceeds have been received, and the affected units are being repaired. The remaining loan was flagged because of a management change, which resulted in a temporary occupancy decline; however, the property has since rebounded.

At issuance, DBRS shadow-rated four loans investment grade: Regency Park Apartments (Prospectus ID#12, 2.0% of the pool balance), Oasis at Springtree (Prospectus ID#27, 1.3% of the pool balance), The Woodlands of Odessa (Prospectus ID#48, 0.7% of the pool balance) and Lake Park Village (Prospectus ID#74, 0.2% of the pool balance). DBRS has today confirmed that the performance of these loans remains consistent with investment-grade loan characteristics.

DBRS has provided updated loan-level commentary and analysis for larger and/or pivotal watchlisted loans, as well as for the largest 15 loans in the pool, on the DBRS CMBS IReports platform. To view these and future loan-level updates provided as part of DBRS’s ongoing surveillance for this transaction, please log into DBRS CMBS IReports at www.ireports.dbrs.com.

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

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 to the right under Related Research or by contacting us at info@dbrs.com.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

The principal methodologies are North American CMBS Rating Methodology (January 2017) and CMBS North American Surveillance (December 2016), which can be found on www.dbrs.com under Methodologies.

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