Dec 21 - Fitch Ratings has downgraded six classes and affirmed 12 classes of LB-UBS
commercial mortgage trust series 2007-C1 due to an increase in Fitch's expected loss. A detailed
list of rating actions follows at the end of this press release.
Fitch modeled losses of 13.7% of the remaining pool; expected losses on the
original pool balance total 15.1%, including losses already incurred. The pool
has experienced $130.4 million (3.5% of the original pool balance) in realized
losses to date. Fitch has designated 25 loans (20.4%) as Fitch Loans of Concern,
which includes 13 specially serviced assets (15.3%).
As of the December 2012 distribution date, the pool's aggregate principal
balance has been reduced by 14.9% to $3.19 billion from $3.75 billion at
issuance. No loans have defeased since issuance. Interest shortfalls are
currently affecting classes G through BMP.
The largest contributor to expected losses is the specially-serviced Bethany
Portfolio (9.3% of the pool), which is secured by 16 multifamily properties
located in Austin, TX, Houston, TX, and Maryland. The loan was transferred back
to the special servicer in February 2011 for imminent default and the loan was
brought current in August 2012. Property performance and cash flow remain below
expectations due to soft market conditions and high concessions. The loan was
previously modified in March 2010 which increased the term and IO period by 60
months and reduced the interest rate from 5.28% to 4.94%.
The next largest contributor to expected losses is 1745 Broadway (10.7%), which
is secured by a 636,598 square foot (sf) class A office in the midtown west
submarket of New York, NY. The building is 100% occupied by Random House, which
uses this location as its headquarters. Random House (parent company and
guarantor is Bertelsman AG [rated 'BBB+' by Fitch]) occupies its space pursuant
to a triple net lease expiring in June 2018. The loan is scheduled to mature in
November 2017 and Random House's lease is significantly below market.
The third largest contributor to expected losses is a 517,887 sf industrial
building (1.5%) located in University Park, IL. The loan was transferred to the
special servicer in April 2011 for imminent payment default and a deed in lieu
of foreclosure was closed in March 2012. The special servicer continues working
to stabilize the property.
Fitch downgrades the following classes and assigns or revises Recovery Estimates
(REs) as indicated:
--$371.3 million class A-M to 'Asf' from 'AAAsf'; Outlook Stable;
--$315.6 million class A-J to 'CCCsf' from 'BBsf'; RE 70%;
--$55.7 million class C to 'CCsf' from 'CCCsf'; RE 0%;
--$37.1 million class D to 'CCsf' from 'CCCsf'; RE 0%;
--$18.6 million class E to 'CCsf' from 'CCCsf'; RE 0%;
--$32.5 million class F to 'Csf' from 'CCsf'; RE 0%.
Fitch affirms the following classes and assigns or revises REs as indicated:
--$27.8 million class B at 'CCCsf'; RE 0%;
--$32.5 million class G at 'Csf'; RE 0%;
--$41.8 million class H at 'Csf'; RE 0%;
--$41.8 million class J at 'Csf'; RE 0%;
--$49.2 million class K at 'Dsf'; RE 0%;
--$0 class L at 'Dsf'; RE 0%;
--$0 class M at 'Dsf'; RE 0%;
--$0 class N at 'Dsf'; RE 0%.
Fitch affirms the following classes:
--$213.3 million class A-3 at 'AAAsf'; Outlook Stable;
--$79.2 million class A-AB at 'AAAsf'; Outlook Stable;
--$1.2 billion class A-4 at 'AAAsf'; Outlook Stable;
--$714.9 million class A-1A at 'AAAsf'; Outlook Stable.
Fitch previously withdrew the ratings on the interest-only class X-CP, X-W and
Additional information on Fitch's criteria for analyzing U.S. CMBS transactions
is available in the Dec. 18, 2012 report, 'U.S. Fixed-Rate Multiborrower CMBS
Surveillance and Re-REMIC Criteria', which is available at
'www.fitchratings.com' under the following headers:
Structured Finance >> CMBS >> Criteria Reports