Fitch Affirms Concord Real Estate CDO 2006-1

CHICAGO--(Business Wire)--
Fitch Ratings has affirmed all classes of Concord Real Estate CDO
2006-1 (Concord 2006-1) as follows:

--$202,275,000 class A-1 at 'AAA';

--$23,250,000 class A-2 at 'AAA';

--$46,500,000 class B at 'AA+';

--$20,925,000 class C at 'AA';

--$37,200,000 class D at 'A';

--$22,087,000 class E at 'BBB+';

--$24,413,000 class F at 'BBB-';

--$18,600,000 class G at 'BBB-';

--$18,600,000 class H at 'BB'.

Fitch's affirmation of the above classes is based on the
transaction maintaining an adequate reinvestment cushion and remaining
within its other transaction covenants.

Deal Summary:

Concord 2006-1 is a $465,000,000 revolving commercial real estate
(CRE) cash flow collateralized debt obligation (CDO) that closed on
Dec. 21, 2006. As of the May 20, 2008 trustee report and based on
Fitch categorizations, the CDO was substantially invested as follows:
B-notes including CMBS rake bonds (38.8%), CRE mezzanine loans
(29.4%), CMBS (15.3%), commercial mortgage whole loans/A-notes (14%),
CRE CDO (2.4%), and uninvested proceeds (0.1%). The CDO is also
permitted to invest in real estate investment trust (REIT) debt and
Real Estate Bank Loans.

The portfolio is selected and monitored by WRP Management, LLC, as
collateral asset manager. Concord Real Estate CDO 2006-1 has a
five-year reinvestment period, during which, if all reinvestment
criteria are satisfied, principal proceeds may be used to invest in
substitute collateral. The reinvestment period ends January 2012.

Asset Manager:

Winthrop Realty Partners, L.P. (Winthrop) is the external advisor
to the collateral manager for Concord Real Estate CDO 2006-1. WRP
Management, LLC, a newly formed entity owned collectively by Winthrop
Realty Trust (Winthrop REIT) and Lexington Realty Trust (Lexington),
is the collateral manager. Winthrop REIT and Lexington have entered
into a 50%/50% joint venture to manage CDOs that will be used as
financing vehicles for the benefit of both REITs. The debt-funding
platform created by this partnership invests primarily in CMBS, whole
loans, B-notes and mezzanine loans.

Winthrop is a privately owned full-service national real estate
investment and management company that, together with its affiliated
entities, currently owns and/or manages approximately $3.5 billion in
real estate assets throughout the country, as well as about $80
million in CMBS.

For more details refer to the Fitch Ratings Asset Manager Profile
on Winthrop Realty Partners, L.P., available on the Fitch Ratings web
site www.fitchratings.com.

The whole loans are specially serviced by Ocwen Loan Servicing,
LLC, (rated 'CSS2' by Fitch).

Performance Summary:

As of the May 20, 2008 trustee report, the as-is poolwide expected
loss (PEL) for Concord 2006-1 has increased from 21.5% at the
effective date, June 19, 2007, to 28.75%. This increase is primarily
due to the application of Fitch's interim surveillance methodology to
the rated securities portion of the portfolio (17.7%) and the addition
of one highly leveraged hotel loan (5.7%). As a result of the
increased PEL, the CDO has below average reinvestment flexibility with
6% of cushion based on its current weighted average spread (WAS) of
2.42%.

The CDO's Fitch PEL covenant varies depending on the in-place WAS.
Based on the trustee reported WAS, the PEL covenant can range from
30.25% to 34.75% (the WAS/PEL matrix). The WAS has decreased slightly
from 2.51% at the effective date.

The tighter cushion is somewhat mitigated by the pool's
approximately 30% concentration of long-term, fixed-rate loans. These
loans are less likely to repay during the reinvestment period.

Since the effective date, four commercial real estate loans (CREL)
were repaid (9.2%); while six new CRELs (12.2%) were added to the
pool. The loans added to the pool had a similar weighted average
expected loss than the loans that were paid off. Additionally, two new
CMBS (2.8%) rated 'BBB+' and 'BBB-' were added.

The overcollateralization (OC) and interest coverage (IC) ratios
of all classes have remained above their covenants, as of the May 20,
2008 trustee report.

Collateral Analysis:

The CDO is comprised of approximately 82.3% CRE loans, including
38.8% B-notes including CMBS rake bonds, 29.4% mezzanine loans, and
14% whole loans/A-notes,.

Per the May 20, 2008 trustee report and based on Fitch
categorizations, the CDO contains 30.1% of collateral backed by
hotels, which exceeds the maximum concentration of 30%. This amount
includes the underlying properties within the CMBS securities.
Excluding CMBS securities, the concentration drops to 23.4%. Office
loans comprise the largest percentage of assets in the pool at 38.8%.
The CDO is also within all its geographic covenants.

The Fitch Loan Diversity Index is 378 compared to the covenant of
500, which represents average diversity as compared to other CRE CDOs.

For a summary of the Fitch Loans of Concern and the 10 largest
loans, please refer to the Hartford Mezzanine Investors I Surveyor
Snapshot, which will be available beginning June 13, 2008 at
www.fitchratings.com.

Rating Definitions:

The ratings of the class A-1, A-2, B and C notes address the
likelihood that investors will receive full and timely payments of
interest, as per the governing documents, as well as the aggregate
outstanding amount of principal by the stated maturity date. The
ratings of the class D, E, F, G, and H notes address the likelihood
that investors will receive ultimate interest and deferred interest
payments, as per the governing documents, as well as the aggregate
outstanding amount of principal by the stated maturity date.

Upgrades during the reinvestment period are unlikely given the
pool could still migrate to the PEL covenant. Fitch will consider
placing classes on Rating Watch Negative should the reinvestment
cushion fall below 2%. The Fitch PEL is a measure of the hypothetical
loss inherent in the pool at the 'AA' stress environment before taking
into account the structural features of the CDO liabilities. Fitch PEL
encompasses all loan, property, and poolwide characteristics modeled
by Fitch.

Additionally, Fitch performs value decline stress testing on the
CDO's liabilities. To the extent investment grade rated bonds could be
impaired by a 25% value decline, classes could also be placed on
Rating Watch Negative or downgraded.

Fitch will continue to monitor and review this transaction and
will issue an updated Snapshot report after each committeed review.
The surveillance team will conduct a review whenever there is
approximately 15% change in the collateral composition, or
semi-annually.

For more information on the Fitch Rating Methodology for CREL
CDOs, see 'Rating Methodology for U.S. Commercial Real Estate Loan
CDOs' dated Dec. 20, 2007, also available at www.fitchratings.com.

Fitch's rating definitions and the terms of use of such ratings
are available on the agency's public site, 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 Ratings
Gregg Katz, +1-312-606-2343 (Chicago)
Karen Trebach, +1-212-908-0215 (New York)
Sandro Scenga, +1-212-908-0278
(Media Relations, New York)

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