Fitch Downgrades COMM 2013-CCRE9

Fitch Ratings has downgraded the ratings for three classes and affirmed the ratings for six classes of COMM 2013-CCRE9 Mortgage Trust.

Class B was assigned a Stable Outlook following the downgrade.

RATING ACTIONS

Entity / Debt

Rating

Prior

COMM 2013-CCRE9

A-4 12625UBF9

LT

AAAsf

Affirmed

AAAsf

A-M 12625UAC7

LT

AAAsf

Affirmed

AAAsf

A-SB 12625UBA0

LT

AAAsf

Affirmed

AAAsf

B 12625UAE3

LT

Asf

Downgrade

AA-sf

C 12625UAG8

LT

BBBsf

Downgrade

A-sf

D 12625UAJ2

LT

B-sf

Downgrade

BB-sf

E 12625UAL7

LT

CCsf

Affirmed

CCsf

F 12625UAN3

LT

Csf

Affirmed

Csf

X-A 12625UBC6

LT

AAAsf

Affirmed

AAAsf

Page

of 1

VIEW ADDITIONAL RATING DETAILS

KEY RATING DRIVERS

Increased Loss Expectations: Loss expectations increased since the last rating action primarily due to declining performance at Northridge Mall and concerns about the loan's ability to refinance as it approaches its 2023 maturity date. In addition, higher expected losses were applied pool-wide to address the majority of loans' maturities in 2Q and 3Q 2023. There are 15 Fitch Loans of Concern (FLOCs; 28.6% of the pool), including four loans (10.9%) in special servicing primarily due to declining performance from the coronavirus pandemic.

Fitch's ratings assume a base case loss expectation of 11.3%. The Negative Outlooks reflect the pool's 43.9% retail concentration, which includes two regional malls (Northridge Mall and Valley Hills Mall; 15.4%). The ratings address the potential for FLOCs, including the malls, to be the last remaining loans in the pool.

The largest contributor to loss expectations is the specially serviced loan Valley Hills Mall (6.8%). It is secured by 936,682-sf regional mall (325,166-sf collateral) located in Hickory, NC. The property is anchored by Belk, JCPenney and Dillard's, none of which are part of the collateral. Former anchor tenant Sears closed in 2020. Occupancy declined to 74% at YE 2017 from 90% at YE 2016 following the loss of large tenants. Occupancy rebounded and has remained in the low 80s since 2018. As of the December YE 2021 rent roll collateral occupancy was 81%.

The loan transferred to special servicing in September 2020 due to payment default. Fitch's loss expectations of 57.8% consider the uncertainty of the property's ability to perform back in line with prior historical levels. Fitch's expected losses are based on a stress to the most recent potential sale price, which reflects an implied cap rate of 24%. This is consistent with similar defaulted mall properties and is in-line with the most recent appraisal that Fitch received on the asset.

The second largest contributor to loss expectations, Northridge Mall (8.6%), is secured by 1 million-sf enclosed regional mall (587,484-sf collateral) located in Salinas, CA. The property is anchored by JCPenney and non-collateral tenant Macy's. Additional large non-collateral tenants include Century Theatres, Big Lots and Big 5 Sporting Goods. Collateral occupancy declined to 77% as of September 2021 compared to 98.4% at YE 2020. Servicer reported NOI DSCR was 2.76x as of YTD Sept. 30, 2022 compared to 2.96x at YE 2020. Comparable in-line sales as of TTM Dec 2021 were $575 psf, and total inline sales were $411psf. Fitch modeled a 23.8% loss severity based on a 15% cap rate and an annualized September 2021 NOI.

The third largest contributor to loss expectations, North Oaks (2.8%), is secured by a 448,740-sf power center located in Houston, TX. The property is anchored by Hobby Lobby, Ross Dress for Less and Big Lots. The property has been Real Estate Owned (REO) since June 2021. Occupancy has been declining over the past several years: 88% (YE 2016), 80% (YE 2017), 69% (YE 2018),72% (YE 2019) and 58% (January 2022 rent roll). Fitch's loss expectations of 40.4% are based on a discount to the most recent appraisal value and reflects an implied cap rate of 15%.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to negative rating action/downgrade:

Sensitivity factors that could lead to downgrades include an increase in pool-level losses from underperforming or specially serviced loans.

Downgrades of the 'AAAsf' rated classes are not likely due to their strong credit enhancement and upcoming loan maturities.

Downgrades of the 'Asf' rated class would occur should expected losses for the pool increase substantially.

Downgrades of the 'BBBsf' rated class would occur if the expected losses on the specially serviced loans become greater than expected and/or should the sale of the Valley Hills Mall not occur and performance worsens.

Downgrades of the 'B-sf' and below rated classes would occur should additional loans transfer to special servicing, certainty of losses increase or as losses are realized.

Factors that could, individually or collectively, lead to positive rating action/upgrade:

Sensitivity factors that could lead to upgrades would include stable to improved asset performance coupled with pay down and/or defeasance.

Upgrades of 'Asf' rated class would only occur with significant improvement in CE and/or defeasance and with the stabilization of performance on the FLOCs, particularly the regional malls and North Oaks. Classes would not be upgraded above 'Asf' if there is likelihood for interest shortfalls.

An upgrade to the 'BBBsf' rated class is not likely as the class is reliant on the malls to pay off.

An upgrade of the 'B-sf' rated class is not likely and would only occur if the performance of the remaining pool is stable and/or properties impacted by the coronavirus return to pre-pandemic levels and there is sufficient CE to the class.

Upgrades to the 'Csf' and 'CCsf' categories are unlikely absent significant performance improvement on the FLOCs and substantially higher recoveries than expected on the specially serviced loans.

Best/Worst Case Rating Scenario

International scale credit ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit https://www.fitchratings.com/site/re/10111579.

USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10

Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

ESG Considerations

COMM 2013-CCRE9 has an ESG Relevance Score of '4' for Exposure to Social Impacts due to sustained structural shifts in secular preferences affecting consumer and occupancy trends. This has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors.

Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit

Additional information is available on www.fitchratings.com

PARTICIPATION STATUS

The rated entity (and/or its agents) or, in the case of structured finance, one or more of the transaction parties participated in the rating process except that the following issuer(s), if any, did not participate in the rating process, or provide additional information, beyond the issuer's available public disclosure.

APPLICABLE CRITERIA

North America and Asia-Pacific Multiborrower CMBS Surveillance Criteria (pub. 08 Apr 2021) (including rating assumption sensitivity)

Global Structured Finance Rating Criteria (pub. 26 Oct 2021) (including rating assumption sensitivity)

Structured Finance and Covered Bonds Counterparty Rating Criteria (pub. 04 Nov 2021)

APPLICABLE MODELS

Numbers in parentheses accompanying applicable model(s) contain hyperlinks to criteria providing description of model(s).

CMBS Conduit Surveillance Model, v1.19.5 (1)

ADDITIONAL DISCLOSURES

Dodd-Frank Rating Information Disclosure Form

Solicitation Status

Endorsement Policy

ENDORSEMENT STATUS

COMM 2013-CCRE9 	EU Endorsed, UK Endorsed

DISCLAIMER & DISCLOSURES