CHICAGO--(BUSINESS WIRE)--Fitch Ratings has affirmed four classes of the Boca Hotel Portfolio Trust 2013-BOCA series 2013-BOCA. A detailed list of rating actions follows at the end of this release.
KEY RATING DRIVERS
The affirmations of the Boca Hotel Portfolio Trust reflect improved cash flows on a portfolio level since issuance and increased pool concentration, as the Waldorf Astoria Boca Raton Resort & Spa represents (70.4% of the pool). Additionally, the Waldorf's revenue accounts for approximately 84.6% of the TTM June 2015 NCF, with a membership income line item that is atypical for its asset class.
The Boca Hotel Portfolio was originally secured by four hotels, but after payoffs within the first year of issuance, only two remain; the Waldorf Astoria Boca Raton and the Hyatt Regency Pier Sixty-Six (29.6% of pool). The Waldorf Astoria Boca Raton resort was built in 1926 and expanded and renovated numerous times, with the last major renovations in an amount over $230 million occurring from 2005 until 2014. The Hyatt Regency Pier Sixty-Six Resort & Spa was built in 1957 and underwent the most recent room renovation from 2005 through 2008. A $16 million renovation to the marina was completed in 2014. On a combined basis, the portfolio's TTM ended June 2015 NCF has increased 36.7% from TTM ended June 2014. Additionally, the portfolio's RevPAR and occupancy were at $163.72 and 70.1%, respectively, for TTM ended June 2015, up from $136.30 and 61.7% at issuance.
The Waldorf Astoria Boca Raton resort is a 1,047-key, full-service, hotel comprised of five distinctive structures featuring unique styles of guestrooms and meeting facilities. The resort is located on 365 acres just southeast of downtown Boca Raton, with frontage along Lake Boca Raton and the Atlantic Ocean. The property is capable of accommodating large groups and includes 146,000 sf of meeting space, three fitness centers, 20 tennis courts, 12 food and beverage outlets, two 18-hole championship golf courses, seven swimming pools and a 32-slip marina. As of June 2015, the Waldorf Astoria Boca Raton's year-over-year total revenues increased 12.2% primarily driven by the hotel's Premier Club membership, which comprises 14.5% of total revenue and an increase of 21.4% in food and beverage revenue. RevPar increased 5% to $178.76 as of the TTM ended June 2015, up from $170.32 as of the TTM ended June 2014. Additionally, occupancy at the property improved to 66.4% from 62.0% over the same period.
The Hyatt Regency Pier Sixty-Six Resort & Spa has 384 guestrooms within two 2-story buildings situated along the Intercoastal Waterway across the 17th Street Bridge from the Broward County Convention Center located in Fort Lauderdale, FL. Amenities at the property include three pools, two Har-tru lighted tennis courts, 40,000 sf of meeting space, five food and beverage outlets, an aquatic center, and a fitness center and spa. It also includes a recently renovated 100-slip marina, previously 127-slips, which were reduced in number to accommodate large yachts. As of June 2015, the property's total revenue increased by 32.6%, primarily associated with a 103% increase in marina revenue due to the completed renovations and a 20.7% increase in room revenue. As of TTM ended June 2015, the property's occupancy and RevPAR increased to 80.3% and $122.71 from 72.0% and $101.62 as of TTM ended June 2014, respectively.
RATING SENSITIVITIES
The Rating Outlook for classes A, B and C remain Stable. Class D has been assigned a Positive Outlook and may be upgraded with continued strong performance of the remaining hotels. Additional upgrades will be limited given the pool concentration and increase in revenue associated with non-traditional sources.. Downgrades are not likely due to the continued strong performance.
DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action.
Fitch affirms the following class and revises the Rating Outlook as indicated:
--$77,000,000 class D at 'BB+sf'; Outlook to Positive from Stable.
Fitch affirms the following classes:
--$53,854,119 class A at 'AAAsf'; Outlook Stable;
--$64,200,000 class B at 'AAAsf'; Outlook Stable;
--$33,000,000 class C at 'AAsf'; Outlook Stable;
Fitch does not rate class E, X-CP and X-EXT certificates.
Additional information is available at www.fitchratings.com.
Applicable Criteria
Criteria for Analyzing Large Loans in U.S. Commercial Mortgage
Transactions (pub. 27 Aug 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=870009
Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952
Related Research
Boca Hotel Portfolio Trust 2013-BOCA -- Appendix
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=722449
Additional Disclosures
Dodd-Frank Rating Information Disclosure Form
https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=990295
Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=990295
Endorsement Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31
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