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Rating Action:

Moody's affirms two classes, downgrades five classes, and places five classes under review for downgrade of GSMS 2010-C1

02 Mar 2020

Approximately $431 million of structured securities affected

New York, March 02, 2020 -- Moody's Investors Service, ("Moody's") has affirmed the ratings on two classes, downgraded the ratings on five classes and placed the ratings on five classes under review for possible downgrade in GS Mortgage Securities Corporation II Commercial Mortgages Pass-Through Certificates Series 2010-C1 ("GSMS 2010-C1") as follows:

Cl. A-2, Affirmed Aaa (sf); previously on Oct 8, 2019 Affirmed Aaa (sf)

Cl. B, Affirmed Aaa (sf); previously on Oct 8, 2019 Affirmed Aaa (sf)

Cl. C, Downgraded to A1 (sf) and Placed Under Review for Possible Downgrade; previously on Oct 8, 2019 Affirmed Aa2 (sf)

Cl. D, Downgraded to Ba2 (sf) and Placed Under Review for Possible Downgrade; previously on Oct 8, 2019 Downgraded to Baa1 (sf)

Cl. E, Downgraded to B2 (sf) and Placed Under Review for Possible Downgrade; previously on Oct 8, 2019 Downgraded to Ba1 (sf)

Cl. F, Downgraded to Caa2 (sf) and Placed Under Review for Possible Downgrade; previously on Oct 8, 2019 Downgraded to B1 (sf)

Cl. X*, Downgraded to B3 (sf) and Placed Under Review for Possible Downgrade; previously on Oct 8, 2019 Downgraded to Ba2 (sf)

*Reflects Interest-Only Class

RATINGS RATIONALE

The ratings on two P&I classes were affirmed because the transaction's key metrics, including Moody's loan-to-value (LTV) ratio and Moody's stressed debt service coverage ratio (DSCR) are within acceptable ranges.

The ratings on four P&I classes were downgraded due to the continued decline in performance of the Burnsville Center loan, representing 14% of the pool. The Burnsville Center loan transferred to special servicing in January 2020.

The rating on the interest-only (IO) class was downgraded due to a decline in the credit quality of its referenced classes.

The ratings on four P&I classes were placed on review for possible downgrade resulting from uncertainty regarding the upcoming maturity of Burnsville Center. The rating on one IO class whose referenced classes include these P&I classes was placed on review for possible downgrade.

FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS:

The performance expectations for a given variable indicate Moody's forward-looking view of the likely range of performance over the medium term. Performance that falls outside the given range can indicate that the collateral's credit quality is stronger or weaker than Moody's had previously expected.

Factors that could lead to an upgrade of the ratings include a significant amount of loan paydowns or amortization, an increase in the pool's share of defeasance or an improvement in pool performance.

Factors that could lead to a downgrade of the ratings include a decline in the performance of the pool, an increase in realized and expected losses from specially serviced and troubled loans or interest shortfalls.

METHODOLOGY UNDERLYING THE RATING ACTION

The principal methodology used in rating all classes except interest-only classes was "Moody's Approach to Rating Large Loan and Single Asset/Single Borrower CMBS" published in July 2017. The methodologies used in rating interest-only classes were "Moody's Approach to Rating Large Loan and Single Asset/Single Borrower CMBS" published in July 2017 and "Moody's Approach to Rating Structured Finance Interest-Only (IO) Securities" published in February 2019. Please see the list of ratings at the top of this announcement to identify which classes are interest-only (indicated by the *). Please see the Rating Methodologies page on www.moodys.com for a copy of these methodologies.

DEAL PERFORMANCE

As of the February 12, 2020 distribution date, the transaction's aggregate certificate balance has decreased by 43% to $449 million from $788 million at securitization. The certificates are collateralized by 13 mortgage loans ranging in size from 1% to 17% of the pool. The transaction has a high concentration to three Class B regional malls, representing approximately 34% of the pool balance. While these three loans have amortized a combined 17% from securitization, Class B malls in secondary and tertiary locations have historically exhibited higher cash flow volatility and loss severity and may face higher refinancing risk compared to other major property types.

Four loans representing 24% of the pool have defeased and are secured by US government securities. The defeased loans are The Mall at Partridge Creek, Oliveira Plaza, Canyon Point Marketplace and Lakewood Forest Plaza. The trust has not experienced losses or interest shortfalls since securitization.

Two loans, constituting 23% of the pool, are currently in special servicing. The largest specially serviced loan is the Burnsville Center Loan ($64.4 million -- 14.4% of the pool), which is secured by a portion of a regional mall located in Burnsville, Minnesota, a suburb located south of Minneapolis and St. Paul. The non-collateral anchors include Macy's and JC Penney, and collateral anchor stores include Dick's Sporting Goods and Gordman's. The property has one vacant non-collateral anchor, a former Sears that closed in 2017. The mall's performance peaked in 2015 and has declined since in both occupancy and tenant sales per square foot (PSF), with a significant drop during 2018. The property was 84% leased in September 2019, down from 94% in December 2017 and 96% in December 2016. Mall store sales were $292 PSF in 2018, down from $320 PSF in 2017 and $339 PSF in 2016. While Burnsville Center is the only regional mall within the market south of the Minnesota River, it also competes with Twin Cities Premium Outlets. As a result of declining revenue, the 2018 reported net operating income (NOI) was 32% lower than in 2010. The loan matures in July 2020. The loan transferred to special servicing on January 8, 2020 due to imminent maturity default. The special servicer indicates that the borrower has requested a modification and three year extension.

The second largest specially serviced loan is the Mall at Johnson City Loan ($47.9 million -- 10.7% of the pool), which is secured by a 571,319 square foot (SF) portion of a regional mall located in Johnson City, Tennessee. The mall is anchored by JC Penney, Belk, Dick's Sporting Goods, Forever 21 and formerly a Sears. The Sears store closed in January 2020. As of December 2018, in-line (<10,000 SF) occupancy was 99% and in-line sales were $357 PSF. This loan transferred to special servicing in November 2019 due to imminent maturity default. The loan was modified with a three year loan maturity extension in December 2019. In addition to the extension, the borrower is required to fund reserve accounts and pay $5 million of principal on or before May 6, 2020.

The largest loan in the pool is the 660 Madison Avenue Retail Loan ($77.9 million -- 17.3% of the pool), which is secured by a 264,000 SF retail property that formerly served as the Barneys New York flagship store. Barneys filed for Chapter 11 bankruptcy in August 2019 and was sold to Authentic Brands Group. Barneys closed this location in February 2020. The property benefits from its superior location on Madison Avenue between East 60th Street and East 61st Street in Manhattan. The loan has amortized 22% from securitization. Moody's loan to value (LTV) ratio and stressed DSCR are 59% and 1.53X, respectively.

The second largest non-defeased loan is the Cole Portfolio Loan ($59.6 million -- 13.3% of the pool), which is secured by 20 retail properties and one office property totaling of 531,000 SF located across 14 U.S. states. The largest property, Sunset Valley Homestead, is a 139,000 SF multi-tenant retail property located in Sunset Valley, Texas. The whole portfolio is now 92% leased as of September 2019, down from 94% as of December 2018 and 99% as of December 2017. The loan has amortized 6.2% from securitization. Moody's LTV and stressed DSCR are 60% and 1.63X, respectively.

The third largest non-defeased loan is the Grand Central Mall Loan ($38.6 million -- 8.6% of the pool), which is located in Vienna, West Virginia and is anchored by JC Penney, Belk, Regal, H&M, Dunham's Sports, and a now vacant former Sears space. The sponsor, Washington Prime, has announced plans to demolish and redevelop the former Sears space. The loan has amortized 14.1% from securitization. Moody's LTV and stressed DSCR are 83% and 1.59X, respectively.

REGULATORY DISCLOSURES

For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions of the disclosure form.

The analysis includes an assessment of collateral characteristics and performance to determine the expected collateral loss or a range of expected collateral losses or cash flows to the rated instruments. As a second step, Moody's estimates expected collateral losses or cash flows using a quantitative tool that takes into account credit enhancement, loss allocation and other structural features, to derive the expected loss for each rated instrument.

Moody's did not use any stress scenario simulations in its analysis.

For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Christopher Bergman
Analyst
Structured Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Romina Padhi
VP - Senior Credit Officer
Structured Finance Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

No Related Data.
© 2021 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

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