DBRS Removes Four Classes from Under Review – Negative and Confirms All Classes of Morgan Stanley Capital I Trust, Series 2007-TOP27

DBRS, Inc. (DBRS) has today removed Classes A-J, B, C, D and E of Morgan Stanley Capital I Trust, Series 2007-TOP27 from Under Review with Negative Implications and has confirmed the ratings of all classes as follows:

--Class A-3 at AAA (sf)
--Class A-AB at AAA (sf)
--Class A-4 at AAA (sf)
--Class A-1A at AAA (sf)
--Class X at AAA (sf)
--Class A-M at A (high) (sf)
--Class A-MFL at A (high) (sf)
--Class A-J at BBB (high) (sf)
--Class B at BB (low) (sf)
--Class C at B (low) (sf)
--Class D at CCC (sf)
--Class E at C (sf)
--Class F at C (sf)

Classes A-3 through C maintain a Stable trend.

Since the last surveillance review in December 2013, six loans have been repaid and three loans have fully defeased. As of the December 2014 remittance, the weighted-average (WA) debt service coverage ratio (DSCR) and WA debt yield for the pool are 1.62 times (x) and 10.1%, respectively. Many of the Top 15 loans are secured by quality assets that have continued to perform well over time. The Wan net cash flow change from DBRS underwriting (UW) for all Top 15 loans is 15.6% and the WA DSCR for these loans is 1.78x.

In the last 12 months, two loans have liquidated from the pool and two others have transferred to special servicing. There are a total of three loans in special servicing, with an outstanding principal balance of $68.3 million. The largest loan in special servicing is Springfield Hotel Portfolio (Prospectus ID#13; 1.8% of the current pool balance). The loan is secured by two neighboring hotels located in Springfield, Illinois: a 288-room Crowne Plaza Hotel and a 140-room Holiday Inn Express Hotel. Originally scheduled to mature in April 2012, the loan was transferred to special servicing when the borrower notified the lender that it would be unable to secure refinancing. Subsequent modification negotiations were unsuccessful, and the properties have since become real estate owned. A June 2014 appraisal valued the property at $18.9 million, which is flat from the June 2013 valuation, suggesting that the property’s value and/or local real estate market has stabilized. According to the special servicer, the properties are under contract with the sale scheduled to close by December 31, 2014.

Twelve loans are currently rated investment grade by DBRS, and these shadow-ratings were also confirmed as part of this review. These loans are 485 Madison Avenue (Prospectus ID#9), 161 William Street (Prospectus ID#15), Lennox Town Center (Prospectus ID#26), Eastlake Village Center (Prospectus ID#29), Stuart Woods (Prospectus ID#41), Jillian Square Apartments (Prospectus ID#42), Arizona Self Storage Portfolio (Prospectus ID#43), Sophie Plaza Apartments (Prospectus ID#48), Birchwood Towers CoOp (Prospectus ID#60), Franklin Manor Apartments (Prospectus ID#90), 890 West End Avenue CoOp (Prospectus ID#147) and 247 West 35th Street (Prospectus ID#152). There are 52 loans on the servicer’s watchlist, representing 20.8% of the current pool balance. As part of this surveillance review, DBRS performed an in-depth analysis of all loans in special servicing, the Top 15 loans, the shadow-rated loans and large watchlist loans, which represented 54.8% of the current pool balance.

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 December 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.

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.

DBRS will publish a full report shortly that will provide additional analytical detail on this rating action. If you are interested in receiving this report, contact us at info@dbrs.com.

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