**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, 2019 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  38‐3851382  38‐3851383  38‐7003238** |
|---------------------------------------------------------------------|----------------------------------------------------------------------------|
| **(State or other jurisdiction of incorporation or  organization)** | **(I.R.S. Employer Identification Numbers)**                               |

 

**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:

 

  

| Title of each class | Trading Symbol(s) | Name of each  exchange on which registered |
|---------------------|-------------------|--------------------------------------------|
| 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 in Rule405 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 the Exchange 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) of theEx­change 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**

** **

Except as set forth below, each of theparties to each pooling and servicing agreement listed in the Exhibit Indexboth (1) participates in the servicing function for purposes of Item 1122 ofRegulation AB and (2) constitutes a servicer that meets the criteria in Item1108(a)(2)(i) through (iii) of Regulation AB for purposes of Item 1123 ofRegulation AB:

 

• The trustee under a pooling and servicingagreement has a nominal role with respect to the mortgage pool securitizedpursuant to such pooling and servicing agreement. The trustee’s only servicingfunction is the contingent obligation to make certain advances if the masterservicer under such pooling and servicing agreement fails to do so, while allother servicing functions are performed by other parties. The trustee undereach of the pooling and servicing agreements listed in the Exhibit Index hasconfirmed to the registrant that it has not made any such contingent advancesduring the reporting period, and consequently, each such trustee does not participatein the servicing function for purposes of Item 1122 of Regulation AB, nor doesit perform the functions of a servicer for purposes of the definition of“servicer” under Item 1101 of Regulation AB or for purposes of Item 1123 ofRegulation AB.

 

• The operating advisor under a pooling andservicing agreement represents the interests of senior certificateholders inthe transaction governed by such pooling and servicing agreement and isresponsible for monitoring the performance of the special servicer under suchpooling and servicing agreement and producing certain reports tocertificateholders relating to the resolution of the mortgage pool securitizedpursuant to such pooling and servicing agreement. While the operating advisorunder a pooling and servicing agreement has certain reporting obligations inrespect of the related mortgage pool, it has no obligation to collect ordisburse funds in respect of the mortgage pool or to administer any of theunderlying mortgage loans.  Consequently, the operating advisor under apooling and servicing agreement participates in the servicing function forpurposes of Item 1122 of Regulation AB, but is not responsible for the“management or collection of the pool assets or making allocations ordistributions to holders of the asset-backed securities” within the meaning of“servicer” under Item 1101 of Regulation AB and does not perform the functionsof a servicer for purposes of Item 1123 of Regulation AB.

 

In addition, each of the following parties engaged the services ofcertain servicing function participants and sub-servicers for the reportingperiod, as set forth below:• 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 calendarquarter ending June 30, 2019 is $10,247,854.00.  The Park City CenterMortgage Loan was paid in full on September 9, 2019.

 

**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 (FinancialInformation).**

 

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:

 

Beginningon June 18, 2014, a group of institutional investors filed civil complaints inthe Supreme Court of the State of New York, New York County, and later the U.S.District Court for the Southern District of New York, against Wells Fargo Bank,N.A., (“Wells Fargo Bank”) in its capacity as trustee for certain residentialmortgage backed securities (“RMBS”) trusts. The complaints against Wells FargoBank alleged that the trustee caused losses to investors and asserted causes ofaction based upon, among other things, the trustee's alleged failure to: (i)notify and enforce repurchase obligations of mortgage loan sellers for purportedbreaches of representations and warranties, (ii) notify investors of allegedevents of default, and (iii) abide by appropriate standards of care followingalleged events of default. Relief sought included money damages in anunspecified amount, reimbursement of expenses, and equitable relief. InNovember 2018, Wells Fargo Bank reached an agreement, in which it denied anywrongdoing, to resolve such claims on a classwide basis for the 271 RMBS trustsat issue. On May 6, 2019, the court entered an order approving the settlementagreement. Separate lawsuits against Wells Fargo Bank making similarallegations filed by certain other institutional investors concerning severalRMBS trusts in New York federal and state court are not covered by theagreement. With respect to such litigations, Wells Fargo Bank believesplaintiffs' claims are without merit and intends to contest the claimsvigorously, but there can be no assurances as to the outcome of the litigationsor the possible impact of the litigations on Wells Fargo Bank or the RMBStrusts.

 

Inthe last several years, U.S. Bank National Association (“U.S. Bank”) and otherlarge financial institutions have been sued in their capacity as trustee orsuccessor trustee for certain residential mortgage backed securities("RMBS") trusts. The complaints, primarily filed by investors orinvestor groups against U.S. Bank and similar institutions, allege the trusteescaused losses to investors as a result of alleged failures by the sponsors,mortgage loan sellers and servicers to comply with the governing agreements forthese RMBS trusts. Plaintiffs generally assert causes of action based upon thetrustees’ purported failures to enforce repurchase obligations of mortgage loansellers for alleged breaches of representations and warranties, notifysecurityholders of purported events of default allegedly caused by breaches ofservicing standards by mortgage loan servicers and abide by a heightenedstandard of care following alleged events of default. Currently, U.S. Bank is adefendant in multiple actions alleging individual or class action claimsagainst it.

 

U.S.Bank denies liability and believes that it has performed its obligations underthe RMBS trusts in good faith, that its actions were not the cause of losses toinvestors, that it has meritorious defenses, and it has contested and intendsto continue contesting the plaintiffs’ claims vigorously. However, U.S. Bankcannot assure you as to the outcome of any of the litigation, or the possibleimpact of these litigations on the trustee or the RMBS trusts.

 

OnMarch 9, 2018, a law firm purporting to represent fifteen Delaware statutorytrusts (the “DSTs”) that issued securities backed by student loans (the“Student Loans”) filed a lawsuit in the Delaware Court of Chancery against U.S.Bank National Association (“U.S. Bank”) in its capacities as indenture trusteeand successor special servicer, and three other institutions in theirrespective transaction capacities, with respect to the DSTs and the StudentLoans. This lawsuit is captioned The National Collegiate Student Loan MasterTrust I, et al. v. U.S. Bank National Association, et al., C.A. No.2018-0167-JRS (Del. Ch.). The complaint, which was later amended on June 15,2018, alleged that the DSTs have been harmed as a result of purportedmisconduct or omissions by the defendants concerning administration of thetrusts and servicing of the student loans.

 

U.S.Bank believes that it has performed its obligations as indenture trustee andspecial servicer in good faith and in compliance in all material respects withthe terms of the agreements governing the DSTs (the “Governing Agreements”),and accordingly that the claims against it in the lawsuit are without merit.

 

U.S.Bank has filed a motion seeking dismissal of the operative complaint in itsentirety with prejudice pursuant to Chancery Court Rules 12(b)(1) and 12(b)(6)or, in the alternative, U.S. Bank requested a stay of the case while otherprior filed disputes involving the DSTs and the Student Loans are being litigated.On November 7, 2018, the Court ruled that the case should be stayed in itsentirety pending resolution of the first-filed cases.

 

**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.

 

Thereport on assessment of compliance with applicable servicing criteria furnishedpursuant to Item 1122 of Regulation AB by Midland Loan Services, a Division ofPNC Bank National Association discloses that a material instance ofnoncompliance occurred, as described below:

 

MaterialInstance of Noncompliance

 

In certain instances, the Schedule AL Files (Item 1125of Regulation AB) were not reported in accordance with the terms specified inthe transaction agreements, in conflict with Item 1122(d)(3)(i): “Reports toinvestors, including those to be filed with the Commission, are maintained inaccordance with the transaction agreements and applicable Commissionrequirements. Specifically, such reports: (A) Are prepared in accordance withtimeframes and other terms set forth in the transaction agreements”.  Thenoncompliance consisted of omitted or inaccurately reported numbers due to thefollowing: (1) the initial setup files contained information at the assetlevel, and Midland was required to manually compile the information to presentit at the loan level as required by Schedule AL; and (2) certain reportingrequirements required manual processing by Midland, including the use ofvarious data computation formulas, quality control checks and analysis.

 

The identified instances did not involve the servicing ofassets included in this securitization.

 

StepsTaken to Remedy the Material Instance of Noncompliance

 

Midland’s Schedule AL reporting process was enhanced inApril of 2019, however, the process remained manual throughout the 2019calendar year and additional errors during such year were identified during therelated audit. Following identification, Midland made staffing changes andadditional improvements to its processes and procedures to support its ScheduleAL reporting obligations and expects to move to an automated solution for thisprocess.

 

**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 October 1,2011, 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 Certificate Administrator

 

33.2  Wells Fargo Bank,National Association, as Custodian

 

33.3  Wells Fargo Bank,National Association, as Master Servicer

 

33.4  Midland Loan Services, aDivision of PNC Bank, National Association, as Special Servicer

 

33.5  Trimont Real EstateAdvisors, Inc., as Operating Advisor

 

33.6  CoreLogic CommercialReal Estate Services, Inc., as Servicing Function Participant

 

33.7  National Tax Search,LLC, as Servicing Function Participant

 

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

 

34.1  Wells Fargo Bank,National Association, as Certificate Administrator

 

34.2  Wells Fargo Bank,National Association, as Custodian

 

34.3  Wells Fargo Bank, NationalAssociation, as Master Servicer

 

34.4  Midland Loan Services, aDivision of PNC Bank, National Association, as Special Servicer

 

34.5  Trimont Real EstateAdvisors, Inc., as Operating Advisor

 

34.6  CoreLogic CommercialReal Estate Services, Inc., as Servicing Function Participant

 

34.7  National Tax Search,LLC, as Servicing Function Participant

 

(35)Servicer compliance statement.

 

35.1  Wells Fargo Bank,National Association, as Certificate Administrator

 

35.2  Wells Fargo Bank,National Association, as Custodian

 

35.3  Wells Fargo Bank,National Association, as Master Servicer

 

35.4  Midland Loan Services, aDivision of PNC Bank, National Association, as Special Servicer

 

(99.1)Mortgage Loan Purchase Agreement, dated as of September14, 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 of September14, 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/ Jane Lam

JaneLam, Director and President

(seniorofficer in charge of securitization of the depositor)

 

Date: March 26, 2020