DBRS Downgrades One Class in Morgan Stanley Capital I Trust, Series 2007-TOP27

DBRS has today downgraded Class G in Morgan Stanley Capital I Trust, Series 2007-TOP27, to D (sf) from C (sf). DBRS has also placed Classes C, D, E and F Under Review with Negative Implications.

In conjunction with the downgrade, DBRS has removed the Interest in Arrears designation from Class G, as the class has defaulted.

The downgrade is a result of trust loss realized to Class G following the liquidation of one loan from the pool in October 2013. Marriott Raleigh Crabtree (Prospectus ID#16) was secured by a full-service hotel in Raleigh, North Carolina. The loan was transferred to special servicing ahead of the loan’s maturity date, when the borrower indicated it would be unable to secure refinancing. The borrower negotiated a DPO following a sale of the asset, resulting in a realized loss that eliminated the remaining principal balance of Class H, already rated D (sf), and reduced principal to Class G by approximately 4.6%.

Two other loans previously in special servicing have been liquidated from the trust since the last surveillance review. Empire Towers (Prospectus ID#52) transferred to special servicing in 2009. At the time of the last surveillance review, the advance to value ratio for this loan was approaching 45%, and contributed to this loan sustaining a loss severity in excess of 100%. 6614 East Adamo Drive (Prospectus ID#185) was disposed via note sale, resulting in a 58.3% loss. Both of these loans liquidated from the trust in December 2012.

A total of five loans remain in special servicing with an aggregate outstanding principle balance of $91.9 million. The largest loan in special servicing is the Springfield Hotel Portfolio (Prospectus ID#13, 1.65% of the current pool balance). Because of the continued decline in the performance of the remaining specially serviced loans, coupled with their increased time in special servicing, DBRS anticipates that the loss expectations on several of these loans to have increased. DBRS placed the Classes C through F Under Review with Negative Implications as it performs a full surveillance review of this transaction, which will conclude in the next few months.

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

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.

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