DBRS Downgrades One Class of COMM 2004-LNB3

DBRS has today downgraded the rating of one class of COMM 2004-LNB3 as follows:

-- Class N to D (sf) from C (sf)

Additionally, DBRS has removed the Interest in Arrears designation, as the class has defaulted.

The downgrade is a result of the liquidation, with the August 2013 remittance, of 39 Olympia Avenue (Prospectus ID#55), which was transferred to special servicing in April 2012 for monetary default. The loan was secured by a 77,000 sf industrial property in Woburn, Massachusetts. The property experienced a significant decline in occupancy when its largest tenant vacated the property in January 2012 after being unable to renegotiate its lease terms. The realized trust loss associated with this loan wiped out the remaining principal balance available to Class O (which was already rated D (sf) by DBRS) and reduced the principal balance of Class N by 21%.

One loan remains in special servicing: Beau Terre Office Building (Prospectus ID#16) has been in special servicing since May 2010. The property securing the loan is a 373,000 sf office complex in Bentonville, Arkansas, which is the corporate headquarters for Wal-Mart Stores, Inc. Occupancy, both at the asset and in the market, fell in 2009 when Wal-Mart moved its apparel division to New York. The property is currently real estate owned (REO) and the special servicer’s strategy includes leasing up vacant space and repositioning the asset.

DBRS continues to monitor this transaction in its Monthly CMBS Surveillance Report, with additional information on the DBRS viewpoint for this transaction, including details on the largest loans in the pool, the loans in special servicing and the loans on the servicer’s watchlist.

The August 2013 Monthly Surveillance Report for this transaction will publish shortly. If you are interested in receiving this report, contact us at info@dbrs.com.

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

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

The applicable methodologies are CMBS Rating Methodology (January 2012) and CMBS North American Surveillance Methodology (November 2012), which can be found on our website under Methodologies.