DBRS Downgrades One Class of Morgan Stanley Capital I Trust, Series 2007-IQ16

DBRS Limited (DBRS) has today downgraded the rating of one class of Morgan Stanley Capital I Trust, Series 2007-IQ16 (the Trust) as follows:

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

DBRS has also removed the Interest in Arrears designation from Classes B, C, D, E, F and G of the Trust as previous interest shortfalls affecting these classes have been recouped.

The downgrade is a result of the most recent realized losses to the Trust, which occurred in May 2015 after three loans were liquidated from the pool. The Cotton Corporate Center Flex loan was secured by a 147,627 square foot (sf) flex office property located in Phoenix, Arizona. The loan originally transferred to special servicing in May 2012 for imminent default and became REO in January 2014. At issuance, the property was valued at $27.1 million and, according to the October 2014 appraisal, the property was valued at $15.0 million. According to the May 2015 remittance report, the property was sold for approximately $18.1 million, resulting in a realized loss to the Trust of $5.2 million and a loss severity of 26.7%.

The Cotton Corporate Center Office loan, which originally shared the same Borrower as the Cotton Corporate Center Flex loan, was secured by an 116,858 sf office property located in Phoenix. The loan transferred to special servicing in April 2012 because of imminent default and became REO in April 2013. The most recent appraisal value for the property was $15.1 million as of April 2014 compared with the issuance appraised value of $27.0 million. According to the May 2015 remittance report, the property was sold for approximately $11.6 million, resulting in a realized loss to the Trust of $12.1 million and a loss severity of 62.3%.

The Hillside MHC loan was secured by a 68 pad mobile home community located in Clearwater, Florida. The loan transferred to special servicing in May 2012 as a result of delinquent payments and became REO in February 2014. At issuance, the appraised value for the property was $3.3 million compared with the May 2014 appraised value of $1.9 million. According to the May 2015 remittance report, the property was sold for approximately $2.7 million, resulting in a realized loss to the Trust of approximately $147,000 and a loss severity of 6.1%.

For additional details on the DBRS viewpoint for this transaction and for details on the largest loans in the pool, the loans in special servicing and the loans on the servicer’s watchlist, please see the May 2015 Monthly CMBS Surveillance Report for this transaction, which will be published shortly.

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

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

The applicable methodologies are North American CMBS Rating Methodology (March 2015) and CMBS North American Surveillance (January 2015), which can be found on our website under Methodologies.

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