Fitch Upgrades $217.8MM Houston Galleria Trust, Series 2000-HG.Business Editors NEW YORK--(BUSINESS WIRE)--Nov. 25, 2003 Fitch upgrades Houston Galleria Trust, Commercial Mortgage-Backed Securities, Series 2000-HG certificates as follows: the $27.8 million class B to 'AAA' from 'AA', the $27.8 million class C to 'AA+' from 'A', the $8.8 million class D to 'AA' from 'A-', and the $14.8 million class E to 'A+' from 'BBB'. The following certificates are affirmed as follows: the $138.8 million class A and the interest-only class X at 'AAA'. The certificates evidence beneficial ownership interests in a trust, consisting primarily of a single $225.0 million loan secured by a first lien on a regional mall, Houston Galleria (Galleria), located in Houston, TX. The mall is located approximately six miles west of Houston's Central Business District (CBD (Component Based Development) Building applications with components (objects). See component software. CBD - component based development ). The Galleria has a total area of approximately 1.7 million square feet and is managed by Simon Property Group Simon Property Group, Inc. (NYSE: SPG), also known as SIMON, an S&P 500 company headquartered in Indianapolis, Indiana, is the largest developer of shopping malls in the United States. Simon Property Group, Inc. . The ratings upgrades are based on increasing net cash flow (NCF), stable occupancy, and strong in-line sales. Over the past year the borrower has invested additional funds for renovations to the inside of the property to further modernize the appearance. The Fitch (NCF) for the trailing twelve months In commerce, the trailing twelve months (TTM) is a moving measurement (for example, an average or a sum) over the 12 previous months, using the most recent data available. Also sometimes known as last twelve months (LTM). (TTM TTM Trailing 12 months. Often used with Earnings Per Share. ) June 2003 has increased by 20.1% since issuance. Fitch NCF reflects adjustments for extraordinary income and expense items, an adjustment for a 4% management fee, and allowances for capital improvements, tenant improvements, and leasing commissions. The corresponding overall debt service coverage ratio The debt service coverage ratio (DSCR), or debt service ratio, is the ratio of net operating income to debt payments on a piece of investment real estate. It is a popular benchmark used in the measurement of an income-producing property’s ability to produce (DSCR DSCR See: Debt-service coverage ratio ) has increased to 1.76 times (x), up from 1.40x at origination based on a 9.0% stressed mortgage refinance constant. The Galleria's collateral quality is strong with an excellent location and a strong tenant base. Neiman Marcus, Saks Fifth Avenue Saks Fifth Avenue is a chain of upscale American department stores that is owned and operated by Saks Fifth Avenue Enterprises (SFAE), a subsidiary of Saks Incorporated. It competes in the elite luxury department store market with Neiman Marcus, Bergdorf Goodman and Barneys New , Macy's and Lord & Taylor anchor the mall, accounting for 44% of the total mall space. In accordance with the announcement from May Department Stores The May Department Stores Company was a department store chain founded in 1877 by David May in Leadville, Colorado. Its headquarters moved to St. Louis, Missouri in 1905, and the company went public in 1911. , the Lord & Taylor store at this location is scheduled to be divested. Considering the strength of the property, it is expected that several national anchors will have interest. Lord & Taylor is planning to honor its lease until divestiture. Comparable in-line sales performance for the TTM ended June 2003 were strong. The weighted average occupancy as of June 2003 was 84%. During March of 2003 the fourth phase of the mall, Galleria IV, was completed. Galleria IV, which is not collateral for the trust, consists of 70 additional shops and two additional anchors, Nordstrom and Foley's. Fitch will closely monitor how this new phase impacts the collateral in this transaction. |
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