Macy's made an announcement today in which the company stated that it plans to lay off approximately 2,500 employees and close five stores this spring as part of a cost reduction plan. KBRA evaluated its exposure to the planned store closures, one of which is a 25,980 sf Macy's that serves as collateral for Fashion Place Mall. The property serves as collateral for one of three loans in BB-UBS 2012-TFT, a CMBS large loan transaction. The closing will not impact our ratings at this time, as income from the tenant was excluded from our determination of KBRA Net Cash Flow (KNCF) and KBRA value in determining our ratings.

The related loan has a balance of $202.0 million, or 36.5% of the aggregate trust balance, and is secured by the borrower's fee simple and leasehold interests in a 421,206 sf mall that is owned and operated by GGP. In KBRA's most recent rating report for the transaction, we noted that the Macy's at Fashion Place Mall had a lease-expiration this month. At that time, KBRA was unable to obtain definitive information regarding the retailer's leasing status and excluded its occupancy and base rent. The Macy's store had a relatively small footprint of 25,980 sf, and was not a typical anchor store. As such, it represented only 3.1% of the property's base rent. For more details on the collateral property, as well as our rating analysis, please refer to our CMBS Surveillance Report.

Related Publications (available at https://www.krollbondratings.com):

BB-UBS Trust 2012-TFT Surveillance Report

BB-UBS Trust 2012-TFT Presale Report

Kroll Bond Rating Agency
Analytical:
Allison Werry, 646-731-2335
awerry@krollbondratings.com
or
David Chan, 646-731-2413
dchan@krollbondratings.com