MOODY'S UPGRADES THREE CLASSES AND DOWNGRADES ONE CLASS OF BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INC., SERIES 2003-BBA1
Approximately $323.6 Million of Structured Securities Affected
New York, May 10, 2005 -- Moody's Investors Service upgraded the ratings of three classes,
downgraded the ratings of one class and affirmed the ratings of eight
classes of Bear Stearns Commercial Mortgage Securities Inc.,
Commercial Mortgage Pass-Through Certificates, Series 2003-BBA1
as follows:
-Class A-1, $47,451,243,
Floating, affirmed at Aaa
-Class A-2, $250,045,000,
Floating, affirmed at Aaa
-Class X-1, Notional, affirmed at Aaa
-Class X-2, Notional, affirmed at Aaa
-Class X-3, Notional, affirmed at Aaa
-Class J-MM, $2,884,053,
Floating, affirmed at Baa1
-Class K-MM, $2,753,767,
Floating, affirmed at Baa2
-Class L-MM, $8,213,705,
Floating, affirmed at Baa3
-Class J-GGP, $1,974,323,
Floating, downgraded to Baa3 from Baa1
-Class J-KC, $5,284,458,
Floating, upgraded to A2 from Baa1
-Class K-KC, $1,987,773,
Floating, upgraded to A3 from Baa2
-Class L-KC, $2,976,580,
Floating, upgraded to Baa1 from Baa3
The Certificates are collateralized by five whole mortgage loans and one
senior participation interest. The loans range in size from 11.9%
to 25.8% of the pool based on current principal balances.
As of the April 14, 2005 distribution date the transaction's aggregate
certificate balance has decreased by approximately 37.3%
to $503.0 million from $802.5 million at securitization.
Moody's rates pooled Classes A-1, A-2,
X-1, X-2 and X-3 and rake classes pertaining
to the Monmouth Mall Loan, the General Growth Portfolio Loan and
the Kaiser Center Loan.
Moody's was provided with partial or full-year 2004 operating
results for all six loans and/or participations. Moody's
weighted average loan to value ratio ("LTV") is 66.6%,
compared to 66.2% at origination. Classes A-1,
A-2, X-1, X-2 and X3 have been affirmed
due to stable pool performance. Classes J-MM, K-MM
and L-MM have been affirmed due to the stable performance of the
Monmouth Mall. Class J-GGP has been downgraded due to the
poorer performance of the General Growth Portfolio. Classes J-KC,
K-KC and L-KC have been upgraded due to the improved performance
of Kaiser Center.
The largest exposure in the pool is a senior participation interest in
the Westin St. Francis Loan ($130.0 million -
25.8%). The Westin St. Francis is a full-service
hotel with 1,195 guestrooms, including 84 suites, located
in San Francisco, California. The loan sponsors are Blackstone
Real Estate Partners III L.P. and other Blackstone entities.
At securitization, Moody's recognized occupancy of 76.0%
and an ADR of $191.00, resulting in RevPAR of $143.25.
For calendar year 2004, actual occupancy was 81.3%
and the ADR was $170.08, resulting in RevPAR of $138.30,
for a 3.5% decrease. Additionally, an increase
in fixed charges contributed to the decrease in net cash flow.
Moody's LTV is 69.0%, compared to 62.6%
at securitization. Additional debt includes a $30.0
million B-Note and mezzanine debt in an original amount of $35.0
million.
The second largest exposure is the Monmouth Mall Loan ($107.3
million - 21.3%), which is secured by a first
priority mortgage on a super-regional mall located in Eatontown,
New Jersey. The mall is anchored by Macy's (parent Federated
Department Stores, Inc.; Moody's senior unsecured
Baa1 - on review for possible downgrade), Lord & Taylor
(parent The May Department Stores Company; Moody's senior unsecured
rating Baa2 - on review for possible downgrade), Boscov's
and J.C. Penney (Moody's senior unsecured rating Ba1;
stable outlook). The property contains a total of 1.4 million
square feet, of which 1.0 million square feet serve as loan
collateral. Macy's and J.C. Penney are anchor-owned
stores. Monmouth Mall is the only regional mall in eastern Monmouth
County and along with Freehold Raceway Mall, is one of only two
malls in the county. As of April 2005, the collateral portion
of the property was 96.1% occupied, compared to 96.5%
at securitization. The loan sponsors are Vornado Realty L.P.
(Moody's senior unsecured Baa2; stable outlook) and Charles
Kushner. Moody's LTV is 63.8%, compared
to 64.0% at securitization. There is additional debt
in the form of mezzanine debt in an original amount of $27.6
million. Moody's current shadow rating is Baa3, the
same as at securitization, resulting in the affirmation of Classes
J-MM, K-MM and L-MM.
The third largest exposure is the General Growth Portfolio Loan ($76.0
million - 15.1%), which is secured by a first
priority mortgage on three cross-collateralized and cross-defaulted
regional malls. Century Plaza (742,305 square feet) is located
in Birmingham, Alabama. Mall anchors include J.C.
Penney, McRae's (parent Saks Incorporated; Moody's
senior unsecured rating B1 -- on review direction uncertain) and
Sears (anchor owned -- Moody's senior unsecured shelf Ba1 -
stable outlook). A fourth vacant anchor was previously occupied
by Rich's, which vacated in March 2004. As of December
2004 the collateral portion of the property was 73.1% occupied,
compared to 98.8% at securitization. In-line
comparable sales were $213 PSF in 2004, compared to $245
PSF at securitization. Eagle Ridge Mall (626,568 square feet)
is located in Lake Wales, Polk County, Florida. The
mall is anchored by J.C. Penney, Sears and Dillard's
(anchor owned -- Moody's senior unsecured rating B2 -
stable outlook). As of December 2004, the collateral portion
of the property was 87.7% occupied, compared to 86.8%
at securitization. In-line comparable sales were $273
PSF in 2004, compared to $259 PSF at securitization.
Knollwood Mall (464,321 square feet) consists of a power center,
an anchored strip center and an interior corridor mall located in the
City of St. Louis Park, approximately six miles from downtown
Minneapolis, Minnesota. The mall is anchored by Kohl's
(Moody's senior unsecured rating A3 -- negative outlook),
Cub Foods and T.J. Maxx (parent The TJX Companies,
Inc.; Moody's senior unsecured rating A3; stable
outlook). Since securitization T.J. Maxx moved into
new space increasing its size by over 75.0%, leaving
its former space vacant. As of December 2004 the property was 82.2%
occupied (including the vacant former T.J. Maxx),
compared to 97.5% at securitization. In-line
comparable sales were $242 PSF in 2004, compared to $283
PSF at securitization. The loan sponsor is General Growth Properties,
Inc. (Moody's senior unsecured shelf Ba2; stable outlook).
Moody's LTV is 66.8%, compared to 60.6%
at securitization. Moody's current shadow rating is Baa3,
compared to A3 at securitization, resulting in the downgrade of
Class J-GGP.
The fourth largest exposure is the First Colony Mall Loan ($67.0
million - 13.3%), which is secured by a first
priority mortgage on a super-regional mall located in Sugar Land,
Texas, 21 miles southwest of downtown Houston. The mall is
anchored by Dillard's, Foley's (parent May Department
Stores Company), J.C. Penney and Mervyn's.
The property contains 1.0 million square feet, of which 294,355
square feet (all of the non-anchor in-line space) serves
as collateral for the loan. As of September 2004, the mall
was 89.5% occupied, compared to 85.8%
at securitization. In-line comparable sales were $377
PSF in 2004, compared to $357 PSF at securitization.
The loan sponsors are General Growth Properties, Inc. and
the New York State Common Fund. Moody's LTV is 72.0%,
compared to 73.7% at securitization.
The fifth largest exposure is the Kaiser Center Loan ($62.7
million - 12.5%), which is secured by a first
priority mortgage on (1) a 28-story, Class A-/B+
office building (756,923 square feet) (2) an adjacent 128,236
square foot three-story mall/retail center with a five level parking
garage and (3) a surface parking lot containing a total of 1,574
spaces. The properties are all located in the Lake Merritt submarket
of the Oakland, California CBD. As of December 2004,
the office building was 95.0% leased. Bay Area Rapid
Transit is the largest tenant (32.0% of total building area),
with rent commencements staged through 2005 and 2006 and with a lease
expiration in 2014. The building is presently under contract for
sale at a price well in excess of the outstanding trust asset principal
balance. The loan sponsors are Jack. L. Mahoney,
John S. Long, Steven A. Berlinger and Eugene S.
Rosenfeld. Since securitization the loan balance has decreased
approximately 8.7% due to the disbursement of reserved funds.
Moody's LTV is 60.3%, compared to 68.0%
at securitization. Moody's current shadow rating is Baa1,
compared to Baa3 at securitization, resulting in the upgrade of
Classes J-KC, K-KC and L-KC.
The sixth largest exposure is the Florence Mall Loan ($60.0
million -- 12.0%), which is secured by a first
priority mortgage on a super-regional mall located in Florence,
Kentucky (Cincinnati MSA). The mall is anchored by Sears,
J.C. Penney, Lazarus (parent Federated Department
Stores, Inc.) and Lazarus Home Store. The anchor stores
are not part of the collateral. The mall includes 298,670
square feet of in-line mall space of which 85.1%
was occupied as of December 2004. In-line tenant comparable
sales were $366 per square foot in 2004, compared to $376
per square foot at securitization. The property is owned by affiliates
of General Growth Properties, Inc. and the Illinois State
Teachers' Retirement Fund. Moody's LTV is 67.1%,
compared to 69.7% at securitization.
New York
Tad Philipp
Managing Director
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
New York
Jay Rosen
Vice President - Senior Analyst
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653