Fitch Ratings has downgraded three classes and affirmed nine classes of JPMBB Commercial Mortgage Securities Trust commercial mortgage pass-through certificates series 2014-C18.

RATING ACTIONS

Entity / Debt

Rating

Prior

JPMBB 2014-C18

A-4A1 46641JAV8

LT

AAAsf

Affirmed

AAAsf

A-4A2 46641JAA4

LT

AAAsf

Affirmed

AAAsf

A-5 46641JAW6

LT

AAAsf

Affirmed

AAAsf

A-S 46641JBA3

LT

AAAsf

Affirmed

AAAsf

A-SB 46641JAX4

LT

AAAsf

Affirmed

AAAsf

B 46641JBB1

LT

Asf

Downgrade

AA-sf

C 46641JBC9

LT

BBBsf

Downgrade

A-sf

D 46641JAE6

LT

CCCsf

Affirmed

CCCsf

E 46641JAG1

LT

CCsf

Affirmed

CCsf

Page

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VIEW ADDITIONAL RATING DETAILS

KEY RATING DRIVERS

Increased Loss Expectations: The downgrades reflect Fitch's increased loss expectations since the prior rating action primarily driven by the Miami International Mall. Fitch has identified 11 Fitch Loans of Concern (FLOCs; 48.7% of the pool balance), including three (9.3%) specially serviced loans. Thirteen loans (51.1%) are on the master servicer's watchlist for declines in occupancy, performance declines as a result of the pandemic, upcoming rollover and/or deferred maintenance. Fitch's current ratings incorporate a base case loss of 10.1%.

The largest increase in loss since the prior review is the Miami International Mall (15.2% of the pool) loan, which is secured by the 306,855-sf collateral portion of a 1.1 million-sf regional mall located approximately 12 miles northwest of downtown Miami, FL and 10 miles west of Miami International Airport. The property features three non-collateral tenants, Macy's (2/23 lease expiration), JCPenney (2/23) and Kohl's (2/23), along with a vacant Seritage- owned Sears space that closed in November 2018 (12/53). Large collateral tenants include H&M (7.4% of NRA; 1/25 lease expiration), Old Navy (5.5%; 1/25), Victoria's Secret (4.7%; 1/23) and Forever 21 (4.2%; 1/24). All other tenants comprise less than 3% of NRA individually.

The subject has substantial nearby competition, including the Taubman-owned Dolphin Mall located a mile to the west and the Simon-owned Dadeland Mall located eight miles to the south. The Dolphin Mall is an outlet center that is complementary to the subject while Dadeland Mall has a higher end tenant profile including Nordstrom and Saks Fifth Avenue.

Property occupancy declined to 78% as of March 2022, down from 83% at YE 2020, 99% at YE 2019 and 94% at issuance. Annualized March 2022 NOI debt service coverage ratio (DSCR) was 2.94x, and YE 2021 NOI DSCR was 2.37x, compared to 2.75x at YE 2019. Fitch's analysis applied a 12.5% cap rate to the YE 2021 NOI resulting in a 11% modeled loss.

The largest contributor to overall loss expectations is the specially serviced Meadows Mall (6.2%) loan, which is secured by 308,190sf of in-line space of a 945,043-sf regional mall located in Las Vegas, NV, approximately four miles west of downtown Las Vegas. The four anchors, Dillard's, Macy's, JCPenney and Sears (closed in February 2020), own their improvements. The loan is sponsored by Brookfield Property Partners, which acquired the property and subject loan in August 2018. The loan transferred to the special servicer in October 2020 for monetary default. According to the servicer, discussions are ongoing with the borrower for a potential loan modification.

Servicer-reported NOI DSCR for this loan was 1.27x as of the YTD March 2022 compared with 1.11x at YE 2021 and 1.22x at YE 2020. Collateral occupancy as of March 2022 was reported to be 87.8% compared with 84% at March 2020 and 91% in March 2019. Reported in-line tenant sales increased to $488 per square foot (psf) for YE 2020 compared to $380psf for the trailing 12-month period ending March 31, 2020, $378psf for YE 2018, $364psf for YE 2017 and $416psf at issuance in 2013. Fitch's modeled loss of 39% is based on a discount to a recent servicer-provided valuation.

The second largest contributor to overall loss expectations is the Shops at Wiregrass (6.5% of the pool) loan, which is secured by a 456,637-sf portion of a 759,880-sf outdoor shopping center located in Wesley Chapel, FL, sponsored by Queensland Investment Corporation. The property was built in 2008 and is anchored by Macy's and Dillard's (both non-collateral) and JCPenney (21.1% of NRA; exp. October 2035).

The property suffered declining cash flow during the pandemic, but is recovering to pre-pandemic levels. Servicer-reported NOI debt DSCR increased to 1.44x as of the YTD March 2022 compared with 1.15x at YE 2021, 0.42x at YE 2020 and 1.15x at YE 2019. Collateral occupancy as of March 2022 was 84% compared with 86% at YE 2021, 76% at YE 2020 and 90% at YE 2019. Fitch's analysis applied a 15% cap rate and 5% stress to the YE 2021 NOI resulting in a 34% modeled loss.

Increasing Credit Enhancement (CE): As of the July 2022 distribution date, the pool's aggregate balance has been reduced by 31.4% to $657.1 million from $957.6 million at issuance. Three loans (3.1% at prior review) have paid down at maturity or post maturity. Eleven loans (14% of current pool) are fully defeased. Only one loan (2.8%) is full term interest only and all remaining loans are currently amortizing. In 2020, the pool had a $29.2 million loss from the disposition of 545 Madison Avenue. Interest shortfalls totaling $652,077 are currently impacting the non-rated class NR and class F.

Pari Passu Loans: Five loans (51.8% of pool) are pari passu.

Concentrated Pool: The transaction is becoming increasingly concentrated with 36 of the original 51 loans remaining; the top 10 loans comprise 71.3% of the pool. Loans secured by retail properties comprise 63.4% of the pool.

RATING SENSITIVITIES

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

Sensitivity factors that lead to downgrades include an increase in pool level losses from underperforming or specially serviced loans. Downgrades of the 'AAAsf' rating categories are not considered likely due to the position in the capital structure and level of CE, but may occur should interest shortfalls affect these classes.

Downgrades to the 'Asf' and 'BBBsf' category could occur if performance of the FLOCs continues to decline, additional loans transfer to special servicing and/or loans impacted by the pandemic do not stabilize. Further downgrades to the distressed 'CCCsf' rated and below classes would occur with increased certainty of losses or as additional losses are realized.

Fitch has identified both a baseline and a worse-than-expected, adverse stagflation scenario based on fallout from the Russia-Ukraine war whereby growth is sharply lower amid higher inflation and interest rates; even if the adverse scenario should play out, Fitch expects virtually no impact on ratings performance, indicating very few rating or Outlook changes. However, for some transactions with concentrations in underperforming retail exposure, the ratings impact may be mild to modest, indicating some changes on sub-investment grade notes.

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

Sensitivity factors that lead to upgrades would occur with stable to improved asset performance coupled with pay down and/or defeasance. Upgrades of the 'Asf' and 'BBBsf' categories would likely occur with significant improvement in CE and/or defeasance; however, adverse selection, increased concentrations and further underperformance of the FLOCs or loans that continually to be negatively affected by the pandemic could cause this trend to reverse.

Upgrades to the 'CCCsf' and below categories are not likely until the later years in a transaction and only if the performance of the remaining pool is stable and/or properties vulnerable to the coronavirus return to pre-pandemic levels, and there is sufficient credit enhancement to the classes.

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

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 www.fitchratings.com/esg.

Additional information is available on www.fitchratings.com

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