DBRS Downgrades One Class of Morgan Stanley Capital I Trust, Series 2007-TOP25

DBRS Limited (DBRS) has today downgraded the rating of the following class of Commercial Mortgage Pass-Through Certificates, Series 2007-TOP25 (the Certificates) issued by Morgan Stanley Capital I Trust, Series 2007-TOP25 (MS 2007-TOP25 or the Trust):

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

In addition to the rating action above, DBRS has removed the Interest in Arrears designation on Class D.

The rating downgrade is the result of the most recent realized losses to the trust, which occurred after the Ware Road Industrial (Prospectus ID#133) and Lincoln Square (Prospectus ID#140) loans were liquidated from the trust at a combined realized loss of $2.6 million, with the January 2016 remittance. The Ware Road Industrial loan was secured by a single-tenant industrial property located in McAllen, Texas. The loan transferred to special servicing in February 2011 due to non-payment default and subsequently became real estate owned (REO) in December 2014. The loan was resolved with the January 2016 remittance, following the sale of the property to Toscana Palms in December 2015. The last reported property valuation, dated June 2015, valued the property at $1.6 million, down from $3.3 million at issuance.

The Lincoln Square loan was secured by an unanchored retail property located in Mahtomedi, Minnesota. The loan was originally scheduled to mature in December 2016 and was transferred to special servicing in February 2013 following a borrower request for a modification. The borrower’s request for a settlement agreement was denied and the loan remained REO since August 2014 following the foreclosure sale. The most recent appraisal, dated February 2015, valued the property at $2.2 million, reflective of a $930,000 decline from the issuance value.

With the January 2016 remittance, the Ware Road Industrial and Lincoln Square loan were liquidated at a loss severity of 55.7% and 48.2%, respectively. The trust loss wiped the remaining balance on Class E and reduced the principal balance on Class D by 8.0%. As of the January 2016 remittance, there are three loans still in special servicing, with a cumulative outstanding principal balance of $27.8 million.

DBRS continues to monitor this transaction in its Monthly CMBS Surveillance Report, with additional information on the DBRS viewpoint for this transaction. The January 2016 Monthly CMBS 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 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.

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

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

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