**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON,D.C. 20549**

**FORM 10‐K**

 

(Mark one)

**/X/ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934**

**    For the fiscal year endedDecember 31, 2017 OR**

**//TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934**

**For the transition period from****            ****to****            **

 

 

 

**Commission file number:333-167764-01**

 

**Central Index Key Number of the issuingentity:0001528503**

 

**Morgan Stanley Capital I Trust 2011-C3**

**(exact name of issuing entity as specified in itscharter)**

 

**Central Index Key Number of the depositor:0001547361**

 

**Morgan Stanley Capital I Inc.**

**(exact name of the depositor as specified in itscharter)**

 

**Central Index Key Number of the sponsor:0001541557**

 

**Morgan Stanley Mortgage Capital Holdings LLC**

**(exact names of the sponsors as specified in theircharters)**

 

**Central Index Key Number of the sponsor:0001102113**

 

**Bank of America, National Association**

**(exact names of the sponsors as specified in theircharters)**

 

 

|                                                                |
|---------------------------------------------------------------------|
| **New York**                                                   |   |   |   |   |   |   |
|                                                                | **38‐3851381** |
| **(State or other jurisdiction of incorporation or  organization)** |   | **38‐3851382** |
|                                                                | **38‐3851383** |
|                                                                | **38‐7003238** |
|                                                                | **(I.R.S. Employer Identification No.)** |   |   |
|                                                                |   |

**c/o Wells Fargo Bank, N.A.**

**9062 Old Annapolis Road**

** Columbia, MD**

**(Address of principal executive offices)**

 

**21045**

**(Zip Code)**

 

**Telephone number, including area code:**

**(410) 884‐2000**

Securitiesregistered pursuant to Section 12(b) of the Act:

 

  NONE.

 

Securitiesregistered pursuant to Section 12(g) of the Act:

 

  NONE.

 

Indicateby check mark if the registrant is a well-known seasoned issuer, as defined inRule 405 of the Securities Act.

 

  Yes___ No X

 

Indicateby check mark if the registrant is not required to file reports pursuant toSection 13 or Section 15(d) of the Act.

 

  Yes___ No X

 

Note- Checking the box above will not relieve any registrant required to filereports pursuant to Section 13 or 15(d) of the Exchange Act from theirobligations under those Sections.

 

Indicate by check mark whether the registrant (1) has filed all reportsrequired to be filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject to suchfiling requirements for the past 90 days.

 

  YesX No ___

 

Indicateby check mark whether the registrant has submitted electronically and posted onits corporate Web site, if any, every Interactive Data File required to besubmitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 ofthis chapter) during the preceding 12 months (or for such shorter period thatthe registrant was required to submit and post such files).

 

  Notapplicable.

 

Indicateby check mark if disclosure of delinquent filers pursuant to Item 405 ofRegulation S-K (Section 229.405 of this chapter) is not contained herein, andwill not be contained, to the best of registrant's knowledge, in definitiveproxy or information statements incorporated by reference in Part III of thisForm 10-K or any amendment to this Form 10-K.

 

  Notapplicable.

 

Indicateby check mark whether the registrant is a large accelerated filer, anaccelerated filer, a non-accelerated filer, a smaller reporting company, oremerging growth company. See the definitions of "large acceleratedfiler", "accelerated filer," "smaller reportingcompany," and “emerging growth company” in Rule 12b-2 of theExchange Act.

 

 Largeaccelerated filer ___ Accelerated filer ___ Non-accelerated filer X (Do not check if a smaller reporting company)Smaller reporting company ___

 

Emerginggrowth company ___

 

Ifan emerging growth company, indicate by check mark if the registrant haselected not to use the extended transition period for complying with any new orrevised financial accounting standards provided pursuant to Section 13(a) ofthe Ex­change Act.

 

  Notapplicable.

 

Indicateby check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Act).

 

  Yes___ No X

 

Statethe aggregate market value of the voting and non-voting common equity held bynon-affiliates computed by reference to the price at which the common equitywas last sold, or the average bid and asked price of such common equity, as ofthe last business day of the registrant's most recently completed second fiscalquarter.

 

  Notapplicable.

 

Indicateby check mark whether the registrant has filed all documents and reportsrequired to be filed by Section 12, 13 or 15(d) of the Securities Exchange Actof 1934 subsequent to the distribution of securities under a plan confirmed bya court.

 

  Notapplicable.

 

Indicatethe number of shares outstanding of each of the registrant's classes of commonstock, as of the latest practicable date.

 

  Notapplicable.

 

DOCUMENTSINCORPORATED BY REFERENCE

 

Listhereunder the following documents if incorporated by reference and the Part ofthe Form 10-K (e.g., Part I, Part II, etc.) into which the document isincorporated: (1)Any annual report to security holders; (2) Any proxy orinformation statement; and (3)Any prospectus filed pursuant to Rule 424(b) or(c) under the Securities Act of 1933. The listed documents should be clearlydescribed for identification purposes (e.g., annual report to security holdersfor fiscal year ended December 24, 1980).

 

  Notapplicable.

 

**EXPLANATORY NOTES**

** **

Exceptas set forth below, each of the parties to each pooling and servicing agreementlisted in the Exhibit Index both (1) participates in the servicing function forpurposes of Item 1122 of Regulation AB and (2) constitutes a servicer thatmeets the criteria in Item 1108(a)(2)(i) through (iii) of Regulation AB forpurposes of Item 1123 of Regulation AB:

 

•The trustee under a pooling and servicing agreement has a nominal role withrespect to the mortgage pool securitized pursuant to such pooling and servicingagreement. The trustee’s only servicing function is the contingentobligation to make certain advances if the master servicer under such poolingand servicing agreement fails to do so, while all other servicing functions areperformed by other parties. The trustee under each of the pooling and servicingagreements listed in the Exhibit Index has confirmed to the registrant that ithas not made any such contingent advances during the reporting period, andconsequently, each such trustee does not participate in the servicing functionfor purposes of Item 1122 of Regulation AB, nor does it perform the functionsof a servicer for purposes of the definition of “servicer” underItem 1101 of Regulation AB or for purposes of Item 1123 of Regulation AB.

 

•The operating advisor under a pooling and servicing agreement represents theinterests of senior certificateholders in the transaction governed by suchpooling and servicing agreement and is responsible for monitoring theperformance of the special servicer under such pooling and servicing agreementand producing certain reports to certificateholders relating to the resolutionof the mortgage pool securitized pursuant to such pooling and servicingagreement. While the operating advisor under a pooling and servicing agreementhas certain reporting obligations in respect of the related mortgage pool, ithas no obligation to collect or disburse funds in respect of the mortgage poolor to administer any of the underlying mortgage loans.  Consequently, theoperating advisor under a pooling and servicing agreement participates in theservicing function for purposes of Item 1122 of Regulation AB, but is notresponsible for the “management or collection of the pool assets ormaking allocations or distributions to holders of the asset-backedsecurities” within the meaning of “servicer” under Item 1101of Regulation AB and does not perform the functions of a servicer for purposesof Item 1123 of Regulation AB.

 

Inaddition, each of the following parties engaged the services of certain servicingfunction participants and sub-servicers for the reporting period, as set forthbelow:• Wells Fargo Bank, National Association, as master servicer, engaged theservices of CoreLogic Commercial Real Estate Services, Inc. and National TaxSearch, LLC, in each case as a servicing function participant in respect of theentire mortgage pool for the reporting period.

 

| **PART I**   |                            |
|-------------------|---------------------------------|
|              |                            |
| **Item 1.**  | **Business.**                   |
|              | Omitted.                        |
| **Item 1A.** | **Risk Factors.**          |
|              | Omitted.                        |
| **Item 1B.** | **Unresolved Staff  Comments.** |
|              | None.                           |
| **Item 2.**  | **Properties.**                 |
|              | Omitted.                        |
| **Item 3.**  | **Legal Proceedings.**     |
|              | Omitted.                        |
| **Item 4.**  | **Mine Safety Disclosures.**    |
|              | Omitted.                        |
|              |                            |   |

 

| **PART II**  |                                                                                                                |
|-------------------|---------------------------------------------------------------------------------------------------------------------|
|              |                                                                                                                |
| **Item 5.**  | **Market for Registrant's Common  Equity, Related Stockholder Matters and Issuer Purchases of Equity  Securities.** |
|              | Omitted.                                                                                                            |
| **Item 6.**  | **Selected Financial Data.**                                                                                        |
|              | Omitted.                                                                                                            |
| **Item 7.**  | **Management's Discussion  and Analysis of Financial Condition and Results of Operations.**                         |
|              | Omitted.                                                                                                            |
| **Item 7A.** | **Quantitative and  Qualitative Disclosures About Market Risk.**                                                    |
|              | Omitted.                                                                                                            |
| **Item 8.**  | **Financial Statements and  Supplementary Data.**                                                                   |
|              | Omitted.                                                                                                            |
| **Item 9.**  | **Changes in and  Disagreements With Accountants on Accounting and Financial Disclosure.**                          |
|              | Omitted.                                                                                                            |
| **Item 9A.** | **Controls and Procedures.**                                                                                        |
|              | Omitted.                                                                                                            |
| **Item 9B.** | **Other Information.**                                                                                         |
|              | None.                                                                                                               |
|              |                                                                                                                |   |

 

| **PART III** |                                                                                                 |
|-------------------|------------------------------------------------------------------------------------------------------|
|              |                                                                                                 |
| **Item 10.** | **Directors, Executive  Officers and Corporate Governance.**                                         |
|              | Omitted.                                                                                             |
| **Item 11.** | **Executive Compensation.**                                                                          |
|              | Omitted.                                                                                             |
| **Item 12.** | **Security Ownership of  Certain Beneficial Owners and Management and Related Stockholder Matters.** |
|              | Omitted.                                                                                             |
| **Item 13.** | **Certain Relationships and  Related Transactions, and Director Independence.**                      |
|              | Omitted.                                                                                             |
| **Item 14.** | **Principal Accounting Fees  and Services.**                                                         |
|              | Omitted.                                                                                             |
|              |                                                                                                 |   |

 

**ADDITIONALDISCLOSURE ITEMS FOR REGULATION AB**

 

**Item1112(b) of Regulation AB, Significant Obligor Financial Information.**

 

Themortgaged property securing the Park City Center loan constitutes a significantobligor within the meaning of 1101(k)(2) of Regulation AB. The most recent(unaudited) net operating income of the significant obligor for the 2017calendar year is $23,864,442.

 

**Item1114(b)(2) of Regulation AB, Significant Enhancement Provider FinancialInformation.**

 

Noentity or group of affiliated entities provides any enhancement or othersupport for the certificates as described under Item 1114(a) of Regulation AB.

 

**Item1115(b) of Regulation AB, Certain Derivatives Instruments (Financial Information).**

 

Noentity or group of affiliated entities provides any derivative instruments forthe certificates as described under Item 1115 of Regulation AB.

 

**Item1117 of Regulation AB, Legal Proceedings.**

 

Theregistrant knows of no legal proceeding pending against the sponsors,depositor, trustee, issuing entity, servicer contemplated by Item 1108(a)(3) ofRegulation AB, originator contemplated by Item 1110(b) of Regulation AB, orother party contemplated by Item 1100(d)(1) of Regulation AB, or of which anyproperty of the foregoing is the subject, that is material to security holders,other than as disclosed in the prospectus of the issuing entity filed in a424(b)(5) filing dated October 3, 2011, and other than as follows:

 

OnJune 18, 2014, a group of institutional investors filed a civil complaint inthe Supreme Court of the State of New York, New York County, against WellsFargo Bank, N.A., (“Wells Fargo Bank”) in its capacity as trusteeunder 276 residential mortgage backed securities (“RMBS”) trusts,which was later amended on July 18, 2014, to increase the number of trusts to284 RMBS trusts. On November 24, 2014, the plaintiffs filed a motion tovoluntarily dismiss the state court action without prejudice. That same day, agroup of institutional investors filed a putative class action complaint in theUnited States District Court for the Southern District of New York (the“District Court”) against Wells Fargo Bank, alleging claims againstthe bank in its capacity as trustee for 274 RMBS trusts (the “FederalCourt Complaint”). In December 2014, the plaintiffs’ motion tovoluntarily dismiss their original state court action was granted. As with theprior state court action, the Federal Court Complaint is one of six similar complaintsfiled contemporaneously against RMBS trustees (Deutsche Bank, Citibank, HSBC,Bank of New York Mellon and US Bank) by a group of institutional investorplaintiffs. The Federal Court Complaint against Wells Fargo Bank alleges thatthe trustee caused losses to investors and asserts causes of action based upon,among other things, the trustee's alleged failure to: (i) notify and enforcerepurchase obligations of mortgage loan sellers for purported breaches ofrepresentations and warranties, (ii) notify investors of alleged events ofdefault, and (iii) abide by appropriate standards of care following allegedevents of default. Relief sought includes money damages in an unspecifiedamount, reimbursement of expenses, and equitable relief. Other cases allegingsimilar causes of action have been filed against Wells Fargo Bank and othertrustees in the District Court by RMBS investors in these and othertransactions, and these cases against Wells Fargo Bank are proceeding beforethe same District Court judge. A similar complaint was also filed May 27, 2016in New York state court by a different plaintiff investor. On January 19, 2016,an order was entered in connection with the Federal Court Complaint in whichthe District Court declined to exercise jurisdiction over 261 trusts at issuein the Federal Court Complaint; the District Court also allowed plaintiffs tofile amended complaints as to the remaining, non-dismissed trusts, if they sochose, and three amended complaints have been filed. On December 17, 2016, theinvestor plaintiffs in the 261 trusts dismissed from the Federal CourtComplaint filed a new complaint in New York state court (the “State CourtComplaint”). In September 2017, Royal Park Investments SA/NV(“Royal Park”), one of the plaintiffs in the District Court casesagainst Wells Fargo Bank, filed a putative class action complaint relating totwo trusts seeking declaratory and injunctive relief and money damages based onWells Fargo Bank’s indemnification from trust funds for legal fees andexpenses Wells Fargo Bank incurs or has incurred in defending the DistrictCourt case filed by Royal Park. With respect to the foregoing litigations,Wells Fargo Bank believes plaintiffs' claims are without merit and intends tocontest the claims vigorously, but there can be no assurances as to the outcomeof the litigations or the possible impact of the litigations on Wells FargoBank or the RMBS trusts.

 

Since 2014 various plaintiffsor groups of plaintiffs, primarily investors, have filed claims against U.S.Bank National Association (“U.S. Bank”), in its capacity as trusteeor successor trustee (as the case may be) under certain residential mortgagebacked securities ("RMBS") trusts.  The plaintiffs or plaintiffgroups have filed substantially similar complaints against other RMBS trustees,including Deutsche Bank, Citibank, HSBC, Bank of New York Mellon and WellsFargo.  The complaints against U.S. Bank allege the trustee caused lossesto investors as a result of alleged failures by the sponsors, mortgage loansellers and servicers for these RMBS trusts and assert causes of action basedupon the trustee's purported failure to enforce repurchase obligations ofmortgage loan sellers for alleged breaches of representations and warrantiesconcerning loan quality.  The complaints also assert that the trusteefailed to notify securityholders of purported events of default allegedlycaused by breaches of servicing standards by mortgage loan servicers and thatthe trustee purportedly failed to abide by a heightened standard of care followingalleged events of default.  

               

Currently U.S. Bank is adefendant in multiple actions alleging individual or class action claimsagainst the trustee with respect to multiple trusts as described above with themost substantial case being:  *BlackRock Balanced Capital Portfolio**etal v. U.S. Bank National Association*, No. 605204/2015 (N.Y. Sup. Ct.)(class action alleging claims with respect to approximately 770 trusts) and itscompanion case *BlackRock Core Bond Portfolio et al v. U.S Bank NationalAssociation*, No. 14-cv-9401 (S.D.N.Y.).  Some of the trusts implicatedin the aforementioned Blackrock cases, as well as other trusts, are involved inactions brought by separate groups of plaintiffs related to no more than 100trusts per case. 

 

 U.S.Bank cannot assure you as to the outcome of any of the litigation, or thepossible impact of these litigations on the trustee or the RMBS trusts.However, U.S. Bank denies liability and believes that it has performed itsobligations under the RMBS trusts in good faith, that its actions were not thecause of losses to investors and that it has meritorious defenses, and itintends to contest the plaintiffs’ claims vigorously.

 

**Item1119 of Regulation AB, Affiliations and Certain Relationships and RelatedTransactions.**

 

Theinformation regarding this Item has been disclosed in the prospectus of theissuing entity filed in a 424(b)(5) filing dated October 3, 2011.

 

**Item1122 of Regulation AB, Compliance with Applicable Servicing Criteria.**

 

Thereports on assessment of compliance with the servicing criteria forasset-backed securities and the related attestation reports on such assessmentsof compliance are attached hereto under Item 15.

 

**Item1123 of Regulation AB, Servicer Compliance Statement.**

 

Theservicer compliance statements are attached hereto under Item 15.

 

**PART IV**

 

**Item15. Exhibits, Financial Statement Schedules.**

 

(a) Exhibits.

 

(4.1)Pooling and Servicing Agreement, dated as of October1,2011, between Morgan Stanley Capital I Inc., as depositor, Wells Fargo Bank,National Association, as master servicer, custodian, certificate administratorand authenticating agent, Midland Loan Services, a Division of PNC Bank,National Association, as special servicer, TriMont Real Estate Advisors, Inc.,as trust advisor, and U.S. Bank National Association, as trustee (filed asExhibit 4.1 to the registrant's Current Report on Form 8-K filed on October 12,2011 under SEC File No. 333-167764-01 and incorporated by reference herein).

 

(31)Rule 13a-14(d)/15d-14(d) Certification.

 

(33)Reports on assessment of compliance with servicing criteria for asset-backedsecurities.

33.1  Wells Fargo Bank,National Association, as CertificateAdministrator

33.2  Wells Fargo Bank,National Association, as Custodian

33.3  Wells Fargo Bank,National Association, as MasterServicer

33.4  Midland LoanServices, a Division of PNC Bank,National Association, as Special Servicer

33.5  Trimont Real EstateAdvisors, Inc., as OperatingAdvisor

33.6  CoreLogicCommercial Real Estate Services, Inc., asServicing Function Participant

33.7  National TaxSearch, LLC, as Servicing FunctionParticipant

 

(34)Attestation reports on assessment of compliance with servicing criteria forasset-backed securities.

34.1  Wells Fargo Bank,National Association, as CertificateAdministrator

34.2  Wells Fargo Bank,National Association, as Custodian

34.3  Wells Fargo Bank,National Association, as MasterServicer

34.4  Midland LoanServices, a Division of PNC Bank,National Association, as Special Servicer

34.5  Trimont Real EstateAdvisors, Inc., as OperatingAdvisor

34.6  CoreLogicCommercial Real Estate Services, Inc., asServicing Function Participant

34.7  National TaxSearch, LLC, as Servicing FunctionParticipant

 

(35)Servicer compliance statement.

35.1  Wells Fargo Bank,National Association, as CertificateAdministrator

35.2  Wells Fargo Bank,National Association, as Custodian

35.3  Wells Fargo Bank,National Association, as MasterServicer

35.4  Midland LoanServices, a Division of PNC Bank,National Association, as Special Servicer

 

(99.1)Mortgage Loan Purchase Agreement, dated as ofSeptember14, 2011, between Morgan Stanley Capital I Inc. and Morgan Stanley MortgageCapital Holdings LLC (filed as Exhibit 99.1 to the registrant's Current Reporton Form 8-K filed on October 12, 2011 under SEC File No. 333-167764-01 andincorporated by reference herein).

 

(99.2)Mortgage Loan Purchase Agreement, dated as ofSeptember14, 2011, between Morgan Stanley Capital I Inc. and Bank of America, NationalAssociation (filed as Exhibit 99.2 to the registrant's Current Report on Form8-K filed on October 12, 2011 under SEC File No. 333-167764-01 and incorporatedby reference herein).

 

 (b)See (a) above.

 

(c)Not Applicable.

** **

**SIGNATURES**

 

Pursuantto the requirements of Section 13 or 15(d) of the Securities Exchange Act of1934, the registrant has duly caused this report to be signed on its behalf bythe undersigned, thereunto duly authorized.

 

MorganStanley Capital I Inc.

(Depositor)

 

By:/s/ George Kok

GeorgeKok, President (senior officer in charge of securitization of the depositor)

 

Date:April 2, 2018

 

 

Exhibit Index

 

Exhibit No.

 

(4.1)Pooling and Servicing Agreement, dated as of October 1, 2011, between Morgan StanleyCapital I Inc., as depositor, Wells Fargo Bank, National Association, as masterservicer, custodian, certificate administrator and authenticating agent,Midland Loan Services, a Division of PNC Bank, National Association, as specialservicer, TriMont Real Estate Advisors, Inc., as trust advisor, and U.S. BankNational Association, as trustee (filed as Exhibit 4.1 to the registrant'sCurrent Report on Form 8-K filed on October 12, 2011 under SEC File No.333-167764-01 and incorporated by reference herein).

 

(31)Rule 13a-14(d)/15d-14(d) Certification.

 

(33)Reports on assessment of compliance with servicing criteria for asset-backedsecurities.

33.1Wells Fargo Bank, National Association, as Certificate Administrator

33.2Wells Fargo Bank, National Association, as Custodian

33.3Wells Fargo Bank, National Association, as Master Servicer

33.4Midland Loan Services, a Division of PNC Bank, National Association, as SpecialServicer

33.5Trimont Real Estate Advisors, Inc., as Operating Advisor

33.6CoreLogic Commercial Real Estate Services, Inc., as Servicing FunctionParticipant

33.7National Tax Search, LLC, as Servicing Function Participant

 

(34)Attestation reports on assessment of compliance with servicing criteria for asset-backedsecurities.

34.1Wells Fargo Bank, National Association, as Certificate Administrator

34.2Wells Fargo Bank, National Association, as Custodian

34.3Wells Fargo Bank, National Association, as Master Servicer

34.4Midland Loan Services, a Division of PNC Bank, National Association, as SpecialServicer

34.5Trimont Real Estate Advisors, Inc., as Operating Advisor

34.6CoreLogic Commercial Real Estate Services, Inc., as Servicing FunctionParticipant

34.7National Tax Search, LLC, as Servicing Function Participant

 

(35)Servicer compliance statement.

35.1Wells Fargo Bank, National Association, as Certificate Administrator

35.2Wells Fargo Bank, National Association, as Custodian

35.3Wells Fargo Bank, National Association, as Master Servicer

35.4Midland Loan Services, a Division of PNC Bank, National Association, as SpecialServicer 

 

(99.1)Mortgage Loan Purchase Agreement, dated as of September 14, 2011, betweenMorgan Stanley Capital I Inc. and Morgan Stanley Mortgage Capital Holdings LLC(filed as Exhibit 99.1 to the registrant's Current Report on Form 8-K filed onOctober 12, 2011 under SEC File No. 333-167764-01 and incorporated by referenceherein).

 

(99.2)Mortgage Loan Purchase Agreement, dated as of September 14, 2011, betweenMorgan Stanley Capital I Inc. and Bank of America, National Association (filedas Exhibit 99.2 to the registrant's Current Report on Form 8-K filed on October12, 2011 under SEC File No. 333-167764-01 and incorporated by referenceherein).