DBRS Confirms All Classes of Bear Stearns Commercial Mortgage Securities Trust 2004-PWR5

DBRS has today confirmed the ratings of Bear Stearns Commercial Mortgage Securities Trust 2004-PWR5 as follows:

-Class A-2 at AAA
-Class A-3 at AAA
-Class A-4 at AAA
-Class A-5 at AAA
-Class B at AAA
-Class C at AA (high)
-Class D at AA (low)
-Class E at A (high)
-Class F at A (low)
-Class G at BBB
-Class H at BBB (low)
-Class J at BB (high)
-Class K at BB
-Class L at BB (low)
-Class M at B (high)
-Class N at B
-Class P at B (low)

• Class X-1 at AAA
• Class X-2 at AAA

The trends for all rated classes of the transaction are Stable

Performance of the pool has been very strong since issuance. Currently, 19.7% of the pool is defeased and there is only one loan in special servicing, comprising 0.66% of the pool. Eight loans mature in 2011, with two of those loans being fully defeased. The six remaining 2011 loan maturities have a median debt yield in excess of 12%. DBRS has confirmed the ratings of all classes based on the current pool performance. In addition, DBRS modeled the estimated losses and fees associated with the one loan in special servicing, all of which are expected to be contained to the unrated Class Q. After performing the cash flow stress scenario on the troubled loans and liquidation scenario to the one loan in special servicing, DBRS found the ratings confirmations to be very well supported.

The largest loan, Prospectus ID#1, 2941 Fairview Park Drive (6.96% of the pool), is secured by a Class A office building that is located within the ten-building, 2.1 million sf Fairview Business Park in Falls Church, Virginia, with good accessibility to major highways. Built in 2001, the property is of above average quality however, the tenant roster is strong. The largest tenant, General Dynamics Corporation (49% of NRA) is considered investment grade and has a lease that extends to November 2018.

The second largest loan in the pool, Prospectus ID# 2 ,The Summit Louisville (5.50% of the pool), is a lifestyle shopping center located in northwest Louisville, Kentucky. Occupancy at the center, as of the September 2010 rent roll, was 96.4%. The loan is interest only for the full seven-year loan term. While performance has improved, the property does face the risk of tenant rollover prior to the loan maturity date of June 1, 2011. The property was constructed in 2001; therefore, there are many ten-year leases expiring in 2011 and 2012. DBRS has stressed the cash flow for this particular loan in its modeling scenario to adequately reflect the risk associated with tenant rollover and the upcoming loan maturity. Despite the concern, the loan has a healthy debt yield of approximately 11.4%. DBRS will continue to monitor this loan closely as it approaches maturity.

DBRS confirmed the shadow ratings of New Castle Marketplace (1.1% of the pool) at ‘AAA’ and Palmetto Business Park (1.2% of the pool) at ‘BBB (low)’. Due to a decline in performance since issuance, DBRS has removed the shadow ratings of two loans: World Apparel Center (3.57% of the pool) and New Hampshire Tower (0.59% of the pool). Despite the removal of the shadow ratings, these loans remain current.

As mentioned above, there is one loan in special servicing, totaling 0.66% of the pool balance. The specially serviced loan is Prospectus ID#52, 623 Stewart Avenue, secured by a 51,000 sf anchored retail property located in Garden City, New York. The loan transferred to the special servicer in early 2009 after losing its largest tenant, Comp USA, in 2008. The property is now 20% occupied and has struggled with occupancy issues since transferring to the special servicer. Although DBRS anticipates a loss to the trust associated with this loan, the loss is expected to be contained to the unrated Class Q.

DBRS continues to monitor this transaction on a monthly basis in the Monthly Global CMBS Surveillance Report which can be accessed at www.dbrs.com.

Note:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodologies are CMBS Rating Methodology and CMBS Surveillance, which can be found on our website under Methodologies.