Fitch Ratings downgrades one class and affirms 12 classes of Citigroup Commercial Mortgage Trust commercial mortgage pass-through certificates series 2014-GC23 (CGCMT 2014-GC23).

The Rating Outlooks for seven classes have been revised.

RATING ACTIONS

Entity / Debt

Rating

Prior

CGCMT 2014-GC23

A-3 17322VAS5

LT

AAAsf

Affirmed

AAAsf

A-4 17322VAT3

LT

AAAsf

Affirmed

AAAsf

A-AB 17322VAU0

LT

AAAsf

Affirmed

AAAsf

A-S 17322VAV8

LT

AAAsf

Affirmed

AAAsf

B 17322VAW6

LT

AAsf

Affirmed

AAsf

C 17322VAX4

LT

A-sf

Affirmed

A-sf

D 17322VAE6

LT

BBB-sf

Affirmed

BBB-sf

E 17322VAG1

LT

BB-sf

Affirmed

BB-sf

F 17322VAJ5

LT

CCCsf

Downgrade

B-sf

Page

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VIEW ADDITIONAL RATING DETAILS

KEY RATING DRIVERS

Stable Loss Expectations: The affirmations reflect the overall stable performance of the pool; the downgrade addresses the increased maturity default risks associated with two retail loans within the top-15 including Chula Vista Center and Centre Properties Portfolio. Fitch identified four loans (11.9% of the pool) as Fitch Loan of Concern (FLOC) including one loan (0.4%) in special servicing. Fitch's current ratings incorporate a base case loss expectation of 5.6%.

Fitch Loans of Concern: The largest contributor to losses is the Chula Vista Center (7.0%), a regional mall located in Chula Vista, CA in the San Diego metro area. As of September 2022, total mall occupancy improved to 68% from 64% in 2021. Mall occupancy had previously declined to 64% from 89% due to Sears (non-collateral, 28% of mall NRA), closing at the subject location in February 2020 after filing for bankruptcy.

Non-collateral anchor Macy's (16% of the mall NRA, LXP November 2033) was converted to a Macy's Backstage in 2018 aligning the tenant profile with the off-price merchandising mix at the center. Collateral tenants include Burlington (17% of the collateral NRA, April 2025) and JCPenney (16% of the collateral NRA, November 2023) which both remain on the rent roll. JCPenney has an upcoming lease expiration in November 2023. They exercised their first of three, five-year extension options in 2018.

Fitch's modeled loss of approximately 42% reflects a cap rate of 15% and the YE 2021 NOI.

The second largest driver to losses is Centre Properties Portfolio (3.3%), a portfolio of four retail properties located in the Indianapolis metro area, IN. The loan transferred to special servicing in June 2020 due to imminent monetary default as a result of pandemic-related stress. The loan was returned to the master servicer in May 2022 after the execution of a settlement agreement with the borrower. The largest tenant in the portfolio, Bed Bath and Beyond (18% of portfolio NRA) with lease expiration in 2026, was not on the company store closure list as of February 2023. The TTM June 2022 portfolio occupancy was 85% with NOI DSCR of 1.18x, compared with issuance occupancy and NOI DSCR of 93% and 1.45x, respectively.

Fitch's modeled loss of approximately 16% is based on a cap rate of 9.12% and a 5% stress to the TTM June 2022 NOI.

One loan is in special servicing which is the Rite Aid - La Vergne loan (0.4%), a 14,564-sf single tenant retail property located in La Vergne, TN. The property was formerly occupied by Rite-Aid which vacated in 2019. The tenant has a lease expiration in December 2027. The loan transferred to special servicing in October 2022 due to borrower's failure to comply with cash management that was activated in 2019. Walgreens, which acquired Rite-Aid, has been current on rental payments at the property. Ongoing discussions are taking place with the borrower.

Fitch modeled a minimal loss to account for special servicing fees and expenses.

Minimal Change in Credit Enhancement (CE): As of the February 2023 remittance report, the pool has been paid down by 26.8% to $902.1 million from $1.23 billion at issuance. Twenty-nine loans (27.0%) have been fully defeased. Two loans (26.3%) are full-term interest only (IO) and 27 loans (46.1%) are partial-term IO, all of which have begun amortizing. Of the 83 loans in the transaction at issuance, 60 loans remain, all of which are slated to mature in 2024. Class G is currently experiencing interest shortfalls.

RATING SENSITIVITIES

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

Downgrades to classes A-3 through C and PEZ are not likely due to the position in the capital structure and the high CE and defeasance, but may occur at 'AAAsf' or 'AAsf' should interest shortfalls occur. Downgrades to class D, E and X-C would occur should overall pool losses increase or any large FLOC have an outsized loss which would erode CE. Downgrades to F would occur if performance of the FLOCs fail to stabilize and/or additional loans default and/or transfer to the special servicer.

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:

Upgrades of classes B, C, X-B, and PEZ may occur with further improvement in CE or defeasance. An upgrade to class D would also take into account these factors, but would be limited based on sensitivity to concentrations or the potential for future concentration. Classes would not be upgraded above 'Asf' if there is a likelihood for interest shortfalls. An upgrade to classes E, F, and X-C is not likely unless the FLOCs stabilize, as well as if there is sufficient CE 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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