Rating Action: Moody’s assigns definitive ratings to six CMBS classes of GCT Commercial Mortgage Trust 2021-GCTGlobal Credit Research – 05 Feb 2021$350.0 million of structured securities affectedNew York, February 05, 2021 — Moody’s Investors Service, (“Moody’s) has assigned definitive ratings to six classes of CMBS securities, issued by GCT Commercial Mortgage Trust 2021-GCT, Commercial Mortgage Pass-Through Certificates, Series 2021-GCT:Cl. A, Definitive Rating Assigned Aaa (sf)Cl. B, Definitive Rating Assigned Aa3 (sf)Cl. C, Definitive Rating Assigned A3 (sf)Cl. D, Definitive Rating Assigned Baa3 (sf)Cl. E, Definitive Rating Assigned Ba3 (sf)Cl. HRR, Definitive Rating Assigned B2 (sf)RATINGS RATIONALEThis securitization is collateralized by a first priority deed of trust mortgage on the fee simple interests in (i) a 54-story, Class A office building with grade level retail space and a 978 stall subterranean parking garage located at 555 West 5th Street in Los Angeles, California (the “Gas Company Tower”) and (ii) a 1,166 stall parking garage located at 350 South Figueroa Street in Los Angeles, California (the “World Trade Center Parking Garage” and, together with the Gas Company Tower, the “Property”). Our analysis is based on the quality of the collateral, the amount of subordination supporting each rated class, among other structural characteristics.Moody’s approach to rating this transaction involved the application of our Large Loan and Single Asset/Single Borrower CMBS methodology. The rating approach for securities backed by a single loan compares the credit risk inherent in the underlying collateral with the credit protection offered by the structure. The structure’s credit enhancement is quantified by the maximum deterioration in property value that the securities are able to withstand under various stress scenarios without causing an increase in the expected loss for various rating levels. In assigning single borrower ratings, we also consider a range of qualitative issues as well as the transaction’s structural and legal aspects.The Gas Company Tower is a 54-story, 1,377,053 SF, Class A office building with grade level retail space and a 978 stall on-site subterranean parking garage located at 555 West 5th Street in the Bunker Hill district of downtown Los Angeles, California. The LEED Gold certified tower sits on the east side of West 5th Street and spans an entire city block between South Grand Avenue and South Olive Street.Building amenities include an on-site management team with 24-hour building security, engineering, and maintenance services, valet parking with electric vehicle charging stations and text-in valet services, a banking center, a newsstand, a car wash, a dry cleaner, self-service bike storage, and concierge services.As of January 1, 2021, Gas Company Tower was 75.7% leased to 28 tenants (primarily office). The weighted average remaining lease term of the tenant roster is 6.3 years and the average gross rent is $44.59 PSF. Investment grade, “AM Law 100”, government and “Big 4” accounting firm occupants account for approximately 54.4% of total NRA (71.8% of occupied NRA) and 69.5% of base rent. The largest revenue contributors at the Property include Southern California Gas Co. (A2, senior unsecured; 26.0% of NRA; 29.3% of base rent), Sidley Austin (AM Law 100 #6; 10.0% of NRA; 12.9% of base rent), Deloitte LLP (Big 4 accounting firm; 8.1% of NRA; 10.4% of base rent), WeWork (6.0% of NRA; 9.2% of base rent), Latham & Watkins (AM Law 100 #2; 6.5% of NRA; 7.8% of base rent) and GSA (Aaa, senior unsecured; 2.6% of NRA; 7.5% of base rent). The top 10 tenants by base rent represent approximately 68.3% of NRA, approximately 90.0% of base rent and have a weighted average remaining lease term of 6.5 years (weighted based on base rent).The World Trade Center Parking Garage is a 1,166-stall off-site parking garage situated on South Figueroa Street that provides additional parking capacity for the tenants of the Gas Company Tower (approximately an eight-minute walk) as well as nearby transient parkers.The Property has a total of 2,144 parking stalls (approximately 1.56 spaces per 1,000 SF of net rentable area (“NRA”), which includes the parking stalls located at the Gas Company Tower and the World Trade Center Parking Garage).The credit risk of loans is determined primarily by two factors: 1) Moody’s assessment of the probability of default, which is largely driven by each loan’s DSCR, and 2) Moody’s assessment of the severity of loss upon a default, which is largely driven by each loan’s loan-to-value ratio, referred to as the Moody’s LTV or MLTV. As described in the CMBS methodology used to rate this transaction, we make various adjustments to the MLTV. We adjust the MLTV for each loan using a value that reflects capitalization (cap) rates that are between our sustainable cap rates and market cap rates. We also use an adjusted loan balance that reflects each loan’s amortization profile. The MLTV reported in this publication reflects the MLTV before the adjustments described in the methodology.The Moody’s first-mortgage DSCR is 2.77x and Moody’s first-mortgage stressed DSCR (at a 9.25% constant) is .82x. Moody’s DSCR is based on our assessment of the property’s stabilized NCF.The first mortgage loan balance of $350.0 million represents a Moody’s LTV of 109.3%. Taking into consideration the additional subordinate mezzanine loan with a principal balance of $115.0 million, the total debt Moody’s LTV would increase to 145.3%.Moody’s also grades properties on a scale of 0 to 5 (best to worst) and considers those grades when assessing the likelihood of debt payment. The factors considered include property age, quality of construction, location, market, and tenancy. The property’s weighted average property quality grade is 0.75.Notable strengths of the transaction include: asset quality, tenant roster, and institutional sponsorship.Notable challenges of the transaction include: the effects of the coronavirus, the lack of asset diversification, soft submarket, subordinate debt, and certain credit negative loan structure and legal features.The principal methodology used in these ratings was “Moody’s Approach to Rating Large Loan and Single Asset/Single Borrower CMBS” published in September 2020 and available at https://www.moodys.com/viewresearchdoc.aspx?docid=PBS_1190579. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.Moody’s approach for single borrower and large loan multi-borrower transactions evaluates credit enhancement levels based on an aggregation of adjusted loan level proceeds derived from our Moody’s loan level LTV ratios. Major adjustments to determining proceeds include leverage, loan structure, and property type. These aggregated proceeds are then further adjusted for any pooling benefits associated with loan level diversity, other concentrations and correlations.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 may indicate that the collateral’s credit quality is stronger or weaker than Moody’s had previously anticipated. Factors that may cause an upgrade of the ratings include significant loan pay downs or amortization, an increase in the pool’s share of defeasance or overall improved pool performance. Factors that may cause a downgrade of the ratings include a decline in the overall performance of the pool, loan concentration, increased expected losses from specially serviced and troubled loans or interest shortfalls.The coronavirus outbreak, the government measures put in place to contain it, and the weak global economic outlook continue to disrupt economies and credit markets across sectors and regions. Our analysis has considered the effect on the performance of commercial real estate from the current weak US economic activity and a gradual recovery for the coming months. Although an economic recovery is underway, it is tenuous and its continuation will be closely tied to containment of the virus. As a result, the degree of uncertainty around our forecasts is unusually high.We regard the coronavirus outbreak as a social risk under our ESG framework, given the substantial implications for public health and safety.REGULATORY DISCLOSURESFor further specification of Moody’s key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody’s Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.Further information on the representations and warranties and enforcement mechanisms available to investors are available on http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBS_1263891.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 quantitative analysis entails an evaluation of scenarios that stress factors contributing to sensitivity of ratings and take into account the likelihood of severe collateral losses or impaired cash flows. Moody’s weights the impact on the rated instruments based on its assumptions of the likelihood of the events in such scenarios occurring.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.The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.These ratings are solicited. Please refer to Moody’s Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.Moody’s general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243406.At least one ESG consideration was material to the credit rating action(s) announced and described above.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody’s affiliates outside the EU and is endorsed by Moody’s Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody’s office that issued the credit rating is available on www.moodys.com.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody’s affiliates outside the UK and is endorsed by Moody’s Investors Service Limited, One Canada Square, Canary Wharf, London E14 5FA under the law applicable to credit rating agencies in the UK. Further information on the UK endorsement status and on the Moody’s office that issued the credit rating is available on www.moodys.com.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. David Fine Vice President – Senior Analyst Structured Finance Group Moody’s Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. 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