DBRS Downgrades Two Classes of Bear Stearns Commercial Mortgage Securities Trust, Series 2007-TOP26

DBRS has today downgraded two classes of the Bear Stearns Commercial Mortgage Securities Trust, Series 2007-TOP26 as follows:

-- Class J to D (sf) from C (sf)
-- Class K to D (sf) from C (sf)

The Interest in Arrears designation has been removed from both classes.

These rating actions reflect the most recent losses to the trust, resulting from the liquidation of one loan, Prospectus ID #44 (Gemini Plaza), in June 2012. Realized losses for that loan were $5.63 million, with cumulative losses of $33.33 million to the trust as of the June 2012 remittance report. Since issuance, ten loans have been liquidated and one loan has been modified, resulting in a cumulative realized loss to the trust of $33.33 million as of the June 2012 remittance report.

Prospectus ID #44 (Gemini Plaza) was secured by a 159,000 sf office property located approximately 25 miles from the Houston, Texas CBD. The property is adjacent to the NASA Johnson Space Center and, at issuance, the property was 100% occupied by NASA. NASA vacated the property at lease expiration in May 2011, and the loan transferred to the special servicer in June 2011 after the borrower requested relief. At issuance, the property was valued at $17.0 million ($107 psf) and an appraisal from August 2011valued the property at $6.3 million ($40 psf). According to the June 2012 remittance report, the property was sold for approximately $6.0 million, resulting in a realized loss severity of approximately 56.53%.

As of the June 2012 remittance report, there were nine loans in special servicing, representing 8.01% of the outstanding pool balance. The largest of these loans is Prospectus ID #7 (909 A Street), which represents 2.67% of the pool.

DBRS will conduct a full surveillance review of this transaction within the next 60 days.

For additional details on the DBRS viewpoint for this transaction, and for details on the largest loans in the pool, the remaining loans in special servicing and the loans on the servicer’s watchlist, please see the June 2012 Monthly Surveillance Report for this transaction, which will publish shortly.

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

The applicable methodology is CMBS Rating Methodology (January 2012) and CMBS North American Surveillance Methodology (May 2011), which can be found on our website under Methodologies.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.