DBRS Downgrades One Class of Bear Stearns Commercial Mortgage Securities Trust 2007-PWR18

DBRS has today downgraded Class M of Bear Stearns Commercial Mortgage Securities Trust 2007-PWR18 (the Trust) to D (sf) from C (sf).

The downgrade follows realized losses incurred on the Trust following the liquidation of The Mix at Southbridge loan (Prospectus ID#67) in December 2011.

The Mix at Southbridge loan was secured by a 21,000 square foot (sf) retail center built in 2007 and located in downtown Scottsdale, Arizona. The property followed a boutique concept, occupied mainly by independent retailers. The loan originally transferred to special servicing in October 2008 because of monetary default. Performance decline was driven by tenant departures, likely a result of the economic downturn. The most recently reported occupancy at the subject was 49%, as of July 2011.

At the time of liquidation, the loan had a trust loan balance of $8.8 million. The most recent appraisal, dated February 2011, valued the property at $2.9 million. The total realized loss associated with this loan is approximately $8.3 million, as of the December 2011 remittance. This loss eliminated the balance remaining to Class N and reduced the balance of Class M by approximately 32%. Cumulative realized losses to the Trust now total over $65 million. The liquidation of this loan also allowed for the repayment of unpaid interest to Classes H through L; however, DBRS believes the repayment to be temporary, as a number of delinquent loans remain in special servicing at this time and shortfalls are expected to resume. DBRS’s current expectations of losses from the remaining specially serviced loans are contained to Class H.

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

The applicable methodology is CMBS Rating Methodology and CMBS North American Surveillance Methodology, which can be found on our website under Methodologies.