MOODY'S DOWNGRADES FIVE CLASSES OF BANC OF AMERICA COMMERCIAL MORTGAGE INC., SERIES 2001-1
Approximately $875.9 Million of Structured Securities Affected
New York, December 14, 2004 -- Moody's Investors Service affirmed the ratings of twelve classes
and downgraded the ratings of five classes of Banc of America Commercial
Mortgage Inc., Commercial Mortgage Pass-Through Certificates,
Series 2001-1 as follows:
-Class A-1, $112,887,863,
Fixed, affirmed at Aaa
-Class A-2, $527,811,659,
Fixed, affirmed at Aaa
-Class A-2F, $50,000,000,
Floating, affirmed at Aaa
-Class X, Notional, affirmed at Aaa
-Class B, $35,576,642, Fixed,
affirmed at Aa2
-Class C, $21,345,985, Fixed,
affirmed at A1
-Class D, $18,974,209, Fixed,
affirmed at A2
-Class E, $9,487,105, Fixed,
affirmed at A3
-Class F, $9,487,105, Fixed,
affirmed at Baa1
-Class G, $18,974,209 Fixed, affirmed
at Baa2
-Class H, $14,230,657, Fixed,
affirmed at Baa3
-Class J, $13,281,946, Fixed,
affirmed at Ba1
-Class K, $23,480,584, Fixed,
downgraded to B1 from Ba2
-Class L, $2,134,598, Fixed,
downgraded to B2 from Ba3
-Class M, $5,538,842, Fixed,
downgraded to B3 from B1
-Class N, $6,788,329, Fixed,
downgraded to Caa2 from B2
-Class O, $5,883,218, Fixed,
downgraded to Ca from B3
As of the November 15, 2004 distribution date, the transaction's
aggregate balance has decreased by approximately 6.1% to
$890.8 million from $948.1 million at securitization.
The Certificates are collateralized by 177 mortgage loans secured by commercial
and multifamily properties. The pool includes one shadow rated
loan, representing 9.8% of the pool, and a conduit
component, representing 90.2% of the pool.
The conduit loans range in size from less than 1.0% to 3.7%
of the pool, with the top 10 conduit loans representing 22.3%
of the pool. Five loans have been liquidated from the pool resulting
in aggregate realized losses of approximately $8.6 million.
Eleven loans, representing 7.0% of the pool,
are in special servicing. Four of these loans are to related borrowers,
including the RCA- Royal St. Moritz Apartments Loan ($20.5
million - 2.3%), the RCA- Regency Arms
Loan ($11.1 million - 1.2%),
the RCA-Lexington Apartments Loan ($9.4 million -
1.0%) and the RCA-Royal Phoenician Apartments Loan
($9.0 million - 1.0%). Moody's
has estimated aggregate losses of approximately $11.6 million
for all of the specially serviced loans.
Moody's was provided with year-end 2003 borrower financials
for 93.0% of the pool's performing loans. Moody's
loan to value ratio ("LTV") for the conduit pool, excluding
the three REO loans, is 91.4%, compared to 87.4%
at securitization. The downgrade of Classes K through O is due
to realized and expected losses from specially serviced loans and LTV
dispersion. Based on Moody's analysis, 25.5%
of the conduit pool has a LTV greater than 100.0%,
compared to 4.1% at securitization. Three of the
top ten loans are watchlisted by the master servicer including the sixth
largest loan -- Tally Plaza, the eight largest loan --
Northwest-Hidden Valley and the ninth largest loan -- Keswick
Village Apartments. The fifth largest loan -- RCA-Royal
St. Moritz Apartments, is in special servicing.
The shadow rated loan is the 315 Park Avenue Loan ($87.2
million - 9.8%), which is secured by a 320,000
square foot Class B office building located in the Midtown South market
of New York City. The largest tenant is Credit Suisse First Boston
("CSFB"; Moody's senior unsecured rating Aa3),
which currently occupies 73.7% of the net rentable area
(lease expiration April 30, 1917). The building is currently
88.0% occupied, compared to 100.0% at
securitization. The decline in occupancy is caused by the bankruptcy
of Vanguarde Media ("Vanguarde"), which vacated 45,963
square feet in 2002. CSFB is obligated to lease the space formerly
occupied by Vanguarde in January 2010. Moody's current shadow
rating is Baa3, the same as at securitization.
The top three conduit loans represent 9.1% of the pool.
The largest conduit loan is the 701 Gateway Loan ($32.8
million - 3.7%), which is secured by a 170,000
square foot office building located in South San Francisco, California.
The property was 100.0% leased as of June 2004, compared
to 98.0% at securitization. The largest tenants are
Actuate Corporation (44.0%; expiration 2008) and HealthPlan
of San Mateo (17.0%; expiration 2006). Although
the property's net income has been stable since securitization,
the market rent has declined significantly. The property's
in-place rents average $28.95 per square foot,
compared to the current market rent of $21.00 per square
foot. Moody's anticipates that the property's cash
flow might decline going forward as current leases expire and new leases
are executed at market rents. Moody's LTV is 90.6%,
compared to 87.5% at securitization.
The second largest conduit loan is the One Lake Park Office Building Loan
($24.7 million - 2.8%), which
is secured by a 192,000 square foot office building located in Richardson,
Texas. The property was 100.0% leased as of June
2004, the same as at securitization. The two largest tenants
are Lennox Industries Inc. (65.0%; expiration
2024) and Philips Semiconductor (12.0%; expiration
April 2007). The property's net income has been stable since
securitization; however market rent has declined significantly.
The property's in-place rents average $23.00
per square foot, compared to the current market rent of $16.40
per square foot. Moody's expects that the property's
cash flow might decline going forward as current leases expire and new
leases are executed at current market rents. Moody's LTV
is 99.7%, the same as at securitization.
The third largest conduit loan is the PSC Holding Corp. Office
Building Loan ($23.4 million - 2.6%),
which is secured by a 328,900 square foot office building and a
26,000 square foot free-standing conference center.
The property is located in Scottsdale, Arizona and is 100.0%
leased to PCS Health Systems (November 2021 expiration). Moody's
LTV is 74.2%, compared to 77.9% at securitization.
The pool collateral is a mix of office (37.5%), multifamily
(34.5%), industrial and self storage (14.4%),
retail (9.3%), and hotel (4.3%).
The collateral properties are located in 34 states plus the District of
Columbia. The top five state concentrations are California (17.6%),
Texas (11.6%), New York (11.6%),
Washington (6.7%) and Georgia (6.1%).
All of the loans are fixed rate.
New York
Tad Philipp
Managing Director
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
New York
Sandra Ruffin
Vice President - Senior Analyst
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653