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Rating Action:

Moody's Affirms Seven and Downgrades 14 CMBS Classes of GCCFC 2005-GG3

27 Aug 2009

Approximately $3.35 Billion of Structured Securities Affected

New York, August 27, 2009 -- Moody's Investors Service ("Moody's") affirmed the ratings of seven classes and downgraded 14 classes of Greenwich Capital Commercial Funding Corp., Commercial Mortgage Pass-Through Certificates, Series 2005-GG3. The downgrades are due to higher expected losses for the pool resulting from realized and anticipated losses from loans in special servicing and increased credit quality dispersion. On July 9, 2009, Moody's placed 14 classes on review for possible downgrade due to an increase in the concentration of specially serviced loans. This action concludes the review. This action is the result of Moody's on-going surveillance of commercial mortgage backed securities ("CMBS") transactions.

As of the August 12, 2009 distribution date, the transaction's aggregate certificate balance has decreased by approximately 6% to $3.39 billion from $3.59 billion at securitization. The Certificates are collateralized by 134 mortgage loans ranging in size from less than 1% to 7% of the pool, with the top 10 loans representing 49% of the pool. The pool includes three loans with underlying ratings, representing 18% of the pool. Ten loans, representing 4% of the pool, have defeased and are collateralized by U.S. Government securities.

Thirty-two loans, representing 19% of the pool, are on the master servicer's watchlist. The watchlist includes loans which meet certain portfolio review guidelines established as part of the Commercial Mortgage Securities Association's monthly reporting package. As part of our ongoing monitoring of a transaction, Moody's reviews the watchlist to assess which loans have material issues that could impact performance.

One loan has been liquidated from the trust resulting in a loss of $1.8 million. Ten loans, representing 19% of the pool, are currently in special servicing. The top three loans in special servicing, representing 17.5% of the pool, are secured by malls owned by affiliates of General Growth Properties, Inc. ("GGP"). These three loans were transferred to special servicing due to GGP's bankruptcy filing on April 16, 2009. The top two loans are performing as expected, but the third loan, secured by Mall St. Matthews, has experienced an increase in vacancy and a decline in cash flow. On a stand-alone basis, the mall has considerable refinance risk with only five months remaining on the loan term and a Moody's stressed DSCR of 0.88X. However, as it is part of a broader bankruptcy action, a loan extension with amortization is possible which would allow the loan to reduce its leverage. Moody's stressed DSCR is based on Moody's net cash flow ("NCF") and a 9.25% stressed rate applied to the loan balance. The remaining seven specially serviced loans collectively represent less than two percent of the pool and are mostly 90+ days delinquent.

The tenth largest loan in the pool and the primary loan of concern is the Place Properties Portfolio Loan ($98.7 million -- 2.9%). The loan is secured by nine student housing properties located in various southern states. The loan was transferred to special servicing on May 21, 2009 due to imminent default. After the borrower declined to proceed with a loan modification, the loan transferred back to the master servicer on July 21, 2009. The loan is interest-only for the full term and matures in December 2009. Moody's stressed DSCR is 0.62X compared to 0.96X at last review. Moody's estimates an aggregate loss of $65 million (42% severity on average) for the loans in special servicing and the loan of concern.

Moody's was provided with full-year 2008 operating results for 91% of the pool. Moody's weighted average loan to value ("LTV") ratio for the conduit component is 97% compared to 95% at last full review in May 2007. In addition to the increase in overall LTV, credit quality dispersion has increased since last review. Based on Moody's analysis, 12% of the pool has an LTV in excess of 120% compared to 1% at last review. However, some improvement in the pool cash flow has been recognized. Moody's stressed debt service coverage ratio ("DSCR") for the conduit component is 1.09X compared to 1.04X at last review.

Moody's uses a variation of the Herfindahl index ("Herf") to measure diversity of loan size, where a higher number represents greater diversity. Loan concentration has an important bearing on potential rating volatility, including the risk of multiple-notch downgrades under adverse circumstances. The credit neutral Herf score is 40 and the pool has a Herf score of 30.

The largest loan with an underlying rating is the North Star Mall Loan ($232.6 million - 6.9%), which is secured by the borrower's interest in a 1.3 million square foot regional mall located in San Antonio, Texas. The property is the dominant mall in the region and is anchored by JC Penney, Macy's, Saks 5th Avenue, and Dillard's. The overall occupancy as of March 2009 was 97%, the same as at last review. The loan sponsor is GGP. Moody's analysis reflects the elimination of certain tranching benefits associated with the nature of the collateral and the sponsorship of the mall. Moody's no longer has an investment grade underlying rating for this loan. Moody's LTV and stressed DSCR are 76% and 1.13X, respectively, compared to 75% and 1.12X at last review.

The second largest loan with an underlying rating is the Grand Canal Shops at the Venetian Loan ($218.5 million - 6.4%), which represents a 55.5% participation interest in a first mortgage secured by a 537,000 square foot mall located within the Venetian Casino Resort in Las Vegas, Nevada. The mall shop occupancy as of March 2009 was 99% compared to 96% at last review. The comparable inline sales for the trailing twelve month period ending February 2009 were $932 per square foot ("PSF") compared to $1,046 PSF at last review. The loan sponsor is GGP. Moody's analysis reflects the elimination of certain tranching benefits associated with the nature of the collateral and the sponsorship of the mall. Moody's current underlying rating is A3, the same as at last review. Moody's stressed DSCR is 1.32X compared to 1.20X at last review.

The third largest loan with an underlying rating is the Westin Kierland Loan ($135.0 million -- 4.0%), which is secured by a 732-room full service resort and spa hotel located in Phoenix, Arizona. The hotel's RevPAR for the trailing twelve month period ending June 2009 was $145, down 14% from the prior period. The loan sponsor, Host Hotels & Resorts, has recently announced that they intend to pay down the loan with proceeds from a recent senior unsecured debt offering. Moody's current underlying rating is Baa2, the same as at last review. Moody's stressed DSCR is 1.71X compared to 1.68X at last review.

The loan that previously had an underlying rating was the Doral Arrowwood Hotel Loan ($68.8 million - 2.0%), which is secured by a 374-room full service conference resort hotel and 110,000 square foot conference center located in Rye Brook, New York. Pfizer Inc. uses the conference center as its global training facility for its field sales and marketing team. Pfizer is under contract through 2015 to lease the Resort's learning center and a minimum of 33,000 rooms annually, which Pfizer has historically exceeded by a large margin. In the past few years, however, the number of paid rooms by Pfizer has decreased significantly. As a result, the hotel's RevPAR for the trailing twelve month period ending June 2009 was $98, down 15% from the prior period and down from $150 in 2005. Due to a decline in performance, Moody's no longer has an underlying rating for this loan. Moody's LTV and stressed DSCR are 105% and 1.08X, respectively, compared to 79% and 1.37X at last review.

The top three conduit loans represent 18% of the pool. The largest conduit loan is the 1440 Broadway Loan ($221.3 million -- 6.5%), which is secured by a 742,000 square foot office building located in the Times Square submarket of New York City. The property was 96% occupied as of June 2009, compared to 94% at last review. The property is on the master servicer's watchlist due to a low DSCR. Moody's LTV and stressed DSCR are 97% and 1.01X, respectively, compared to 98% and 0.96X at last review.

The second largest conduit loan is The Crescent Loan ($214.8 million -- 6.3%), which is secured by a 1.3 million square foot mixed use office and retail complex located in Dallas, Texas. The property was 98% occupied as of December 2008 compared to 92% at last review. Moody's LTV and stressed DSCR are 82% and 1.18X, respectively, compared to 83% and 1.13X at last review.

The third largest conduit loan is the 498 Seventh Avenue Loan ($181.5 million -- 5.4%), which is secured by an 877,000 square foot office building located in the Garment District submarket of New York City. The property was 100% occupied as of December 2008 compared to 95% at last review. Moody's LTV and stressed DSCR are 95% and 1.05X, respectively, compared to 94% and 1.03X at last review.

Moody's rating action is as follows:

-Class A-2, $1,032,885,332, affirmed at Aaa; previously affirmed at Aaa on 5/2/2007

-Class A-3, $562,418,000, affirmed at Aaa; previously affirmed at Aaa on 5/2/2007

-Class A-AB, $159,047,000, affirmed at Aaa; previously affirmed at Aaa on 5/2/2007

-Class A-4, $783,022,000, affirmed at Aaa; previously affirmed at Aaa on 5/2/2007

-Class A-1-A, $136,292,438, affirmed at Aaa; previously affirmed at Aaa on 5/2/2007

-Class XP, Notional, affirmed at Aaa; previously affirmed at Aaa on 5/2/2007

-Class XC, Notional, affirmed at Aaa; previously affirmed at Aaa on 5/2/2007

-Class A-J, $228,986,000, downgraded to Aa2 from Aaa; previously placed on review for possible downgrade on 7/9/2009

-Class B, $112,247,000, downgraded to A1 from Aa2; previously placed on review for possible downgrade on 7/6/2009

-Class C, $40,410,000, downgraded to A2 from Aa3; previously placed on review for possible downgrade on 7/9/2009

-Class D, $58,368,000, downgraded to Baa1 from A2; previously placed on review for possible downgrade on 7/9/2009

-Class E, $35,920,000, downgraded to Baa2 from A3; previously placed on review for possible downgrade on 7/9/2009

-Class F, $44,899,000, downgraded to Baa3 from Baa1; previously placed on review for possible downgrade on 7/9/2009

-Class G, $35,919,000, downgraded to Ba2 from Baa2; previously placed on review for possible downgrade on 7/9/2009

-Class H, $40,409,000, downgraded to Ba3 from Baa3; previously placed on review for possible downgrade on 7/9/2009

-Class J, $8,980,000, downgraded to B2 from Ba1; previously placed on review for possible downgrade on 7/9/2009

-Class K, $13,470,000, downgraded to B3 from Ba2; previously placed on review for possible downgrade on 7/9/2009

-Class L, $17,960,000, downgraded to Caa2 from Ba3; previously placed on review for possible downgrade on 7/9/2009

-Class M, $13,469,000, downgraded to Ca from B1; previously placed on review for possible downgrade on 7/9/2009

-Class N, $8,980,000, downgraded to C from B2; previously placed on review for possible downgrade on 7/9/2009

-Class O, $13,470,000, downgraded to C from B3; previously placed on review for possible downgrade on 7/9/2009

Moody's monitors transactions on a monthly basis through two sets of quantitative tools -- MOST® (Moody's Surveillance Trends) and CMM (Commercial Mortgage Metrics) on Trepp -- and on a periodic basis through a comprehensive review. Moody's prior full review is summarized in a Press Release dated May 2, 2007. On July 9, 2009, Moody's placed Classes A-J through O on review for possible downgrade. This action concludes the review.

The principal methodology used in rating and monitoring this transaction is "CMBS: Moody's Approach to Rating Fusion Transactions" dated April 19, 2005, which can be found at www.moodys.com in the Credit Policy & Methodologies directory, in the Ratings Methodologies subdirectory. Other methodologies and factors that may have been considered in the process of rating this issue can also be found in the Credit Policy & Methodologies directory.

New York
Sandra Ruffin
VP - Senior Credit Officer
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Michael M. Gerdes
Senior Vice President
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's Affirms Seven and Downgrades 14 CMBS Classes of GCCFC 2005-GG3
No Related Data.
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