Fitch Affirms Real Estate Asset Liquidity Trust 2014-1 Commercial Mtge P-T Ctfs

(The following statement was released by the rating agency)CHICAGO, August 31 (Fitch) Fitch Ratings has affirmed seven classes of Real Estate Asset Liquidity Trust's (REAL-T) commercial mortgage pass-through certificates, series 2014-1. A detailed list of rating actions follows at the end of this release. All currencies are in Canadian dollars (CAD).KEY RATING DRIVERSThe affirmations of REAL-T 2014-1 are based on the stable performance of the underlying collateral since issuance. The Negative Outlook reflects a decline in performance of the hotel assets within the pool which represent 8.3% of the transaction balance. As of the August 2016 distribution date, the pool's aggregate principal balance has been reduced by 4.1% to $269 million from $280.6 million at issuance. There are currently no delinquent or specially serviced loans. Three loans appear on the servicer watchlist (6.7% of the pool) due to declines in debt service coverage ratio (DSCR). In particular, the Four Points Kamloops (2.6%), which is a 78-key limited service hotel in Kamloops, British Columbia, has exhibited a decline in performance with trailing 12 months (TTM) September 2015 RevPAR decreasing to $84.71 from $95.21 at issuance. As of September 2015, TTM net operating income (NOI) DSCR was reported to be 1.03x as compared to 1.76x at issuance. The certificates represent the beneficial ownership in the trust, primary assets of which are 34 loans secured by 46 commercial properties located in five provinces of Canada. The loans were originated or acquired by Royal Bank of Canada, IMC Limited Partnership, and Trez Commercial Mortgage Limited Partnership.Additionally, the ratings reflect strong historical Canadian commercial real estate loan performance, including a low delinquency rate and low historical losses of less than 0.1%, as well as positive loan attributes, such as short amortization schedules, recourse to the borrower, and additional guarantors.There are no partial or full interest-only loans. The pool's scheduled maturity balance represents a paydown of 12.7% of the August 2016 balance. Approximately 91% have full or partial recourse to the sponsor and/or guarantor. The largest loan in the pool is the Skyline Industrial Montreal (10.1%), which is secured by a portfolio of six industrial properties totaling 562,045 square feet (sf) in the Montreal, Quebec area. The loan is full recourse to the borrower and sponsor. As of YE 2015, occupancy was 96% with NOI DSCR of 1.76x as compared with YE 2014 occupancy and DSCR of 96% and 1.57x, respectively. The second largest loan in the pool consists of two cross-collateralized and cross-defaulted loans (8.9%) secured by two anchored retail properties located in Ancaster and Barrie, Ontario. The reported occupancy as of YE 2015 was 96% in-line with YE 2014 with NOI DSCR improving to 1.76x from 1.57x in the same period. The loan is full recourse to the borrower and 50% recourse to the sponsor.The Strongco Building Fort McMurray loan (4.3%) which is secured by a 25,024 sf single-tenant industrial property in Fort McMurray, Alberta was previously being monitored due to exposure to the oil and gas sector and wildfires in the immediate vicinity. The servicer has confirmed that the property has not sustained damage or loss due to the wildfires and performance remains stable. The loan is full recourse to the borrower and sponsor. RATING SENSITIVITIESThe Negative Outlook on class G reflects declining performance of the hotel assets within the pool coupled with slow growth forecasts for the hotel sector. Stable Outlooks reflect overall stable performance of the pool and continued amortization. Upgrades may occur with improved pool performance and significant paydown or defeasance. Downgrades to the classes are possible should overall pool performance decline.DUE DILIGENCE USAGE Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action.Fitch has affirmed the following ratings:--$230.1 million class A at 'AAAsf'; Outlook Stable;--$7 million class B at 'AAsf'; Outlook Stable;--$9.1 million class C at 'Asf'; Outlook Stable;--$7.7 million class D at 'BBBsf'; Outlook Stable;--$3.5 million class E at 'BBB-sf'; Outlook Stable;--$3.2 million class F at 'BBsf'; Outlook Stable;--$2.8 million class G at 'Bsf'; Outlook Negative.All currencies are in Canadian dollars (CAD).Fitch does not rate the interest-only class X or the non-offered $5.6 million class H certificate.Contact:Primary AnalystDavid RoDirector+1-312-368-3132Fitch Ratings, Inc.70 West Madison StreetChicago, IL 60602Committee ChairpersonMary MacNeill Managing Director+1-212-908-0785Media Relations: Sandro Scenga, New York, Tel: +1 212-908-0278, Email: sandro.scenga@fitchratings.com.Additional information is available at www.fitchratings.com.Applicable Criteria Counterparty Criteria for Structured Finance and Covered Bonds (pub. 18 Jul 2016)https://www.fitchratings.com/site/re/884963Global Structured Finance Rating Criteria (pub. 27 Jun 2016)https://www.fitchratings.com/site/re/883130U.S. and Canadian Fixed-Rate Multiborrower CMBS Surveillance and U.S. Re-REMIC Criteria (pub. 13 Nov 2015)https://www.fitchratings.com/site/re/873395Related Research REAL-T 2014-1 -- Appendixhttps://www.fitchratings.com/site/re/867419Additional Disclosures Dodd-Frank Rating Information Disclosure Form https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr _id=1011069Solicitation Status https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1011069Endorsement Policy https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&det ail=31ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.