DBRS Downgrades Two Classes in Bear Stearns Commercial Mortgage Securities Trust 2007-PWR18

DBRS has today downgraded Class E and Class F of Bear Stearns Commercial Mortgage Securities Trust 2007-PWR18 to D (sf) from C (sf). The downgrade follows the $43.0 million of realized trust loss attributed to the liquidation of one loan in the April 2014 remittance period.

Southlake Mall (Prospectus ID#7) was previously the largest loan in special servicing. The loan was secured by approximately 275,000 square feet (sf) of inline space within a 1.0 regional mall located in Morrow, Georgia. One anchor space was vacant at the time of securitization and owned by the City of Morrow, and a second anchor space went dark when JC Penney vacated as a result of the company closing three of its Atlanta-area stores. Macy’s and Sears act as the mall’s only anchors; however, neither of the stores served as collateral for the loan. Southlake Mall was previously owned and operated by General Growth Properties, Inc. prior to the asset’s foreclosure in Q1 2013. At the time of the last DBRS surveillance review, a buyer had been identified for the property, which had an in-line occupancy rate of 89.1% as of October 2013. The loan was disposed from the trust ahead of the April 2014 remittance and resulted in a realized trust loss of $43.0 million, with an implied purchase price of approximately $36.5 million. At issuance, the property was valued at $157.5 million. The liquidation of this loan wiped the remaining balance of Class G, already rated D (sf) by DBRS, as well as the entire balance of Class F and reduced the principle balance of Class E by 14.2%.

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 April 2014 Monthly Surveillance Report for this transaction will be published 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.

The applicable methodology is 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.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.