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Rating Action:

Moody's Upgrades Seven, Affirms Two, Downgrades One Class of JPMCC 2004-C1

Global Credit Research - 15 May 2014

Approximately $57 Million of Structured Securities Affected

New York, May 15, 2014 -- Moody's Investors Service has upgraded the ratings of seven classes, affirmed the ratings of two classes and downgraded the rating of one class of J.P. Morgan Chase Commercial Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2004-C1 as follows:

Cl. F, Upgraded to Aaa (sf); previously on Jan 10, 2014 Upgraded to A1 (sf)

Cl. G, Upgraded to Aaa (sf); previously on Jan 10, 2014 Upgraded to A2 (sf)

Cl. H, Upgraded to Aa2 (sf); previously on Jan 10, 2014 Upgraded to A3 (sf)

Cl. J, Upgraded to Baa2 (sf); previously on Jan 10, 2014 Upgraded to Ba1 (sf)

Cl. K, Upgraded to Ba2 (sf); previously on Jan 10, 2014 Affirmed B1 (sf)

Cl. L, Upgraded to B1 (sf); previously on Jan 10, 2014 Affirmed B3 (sf)

Cl. M, Upgraded to Caa1 (sf); previously on Jan 10, 2014 Affirmed Caa2 (sf)

Cl. N, Affirmed Ca (sf); previously on Jan 10, 2014 Affirmed Ca (sf)

Cl. P, Affirmed C (sf); previously on Jan 10, 2014 Affirmed C (sf)

Cl. X-1, Downgraded to B3 (sf); previously on Jan 10, 2014 Affirmed Ba3 (sf)

RATINGS RATIONALE

The ratings of P&I Classes F, G, H, J, K, L and M were upgraded based primarily on an increase in credit support resulting from loan paydowns and amortization. The deal has paid down 57% since Moody's last review. In addition, defeased loans, constituting 45% of the pool, are scheduled to mature in 2015.

The rating on the P&I Classes N and P were affirmed because the ratings are consistent with Moody's expected loss.

The rating on the IO Class (Class X-1) was downgraded due to the decline in the credit performance of its reference classes resulting from principal paydowns of higher quality reference classes.

Moody's rating action reflects a base expected loss of 9.6% of the current balance compared to 6.5% at Moody's last review. Moody's base expected loss plus realized losses is now 1.5% of the original pooled balance compared to 1.8% at the last review. Moody's provides a current list of base expected losses for conduit and fusion CMBS transactions on moodys.com at http://v3.moodys.com/viewresearchdoc.aspx?docid=PBS_SF215255.

FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING:

The performance expectations for a given variable indicate Moody's forward-looking view of the likely range of performance over the medium term. Performance that falls outside the given range can indicate that the collateral's credit quality is stronger or weaker than Moody's had previously expected.

Factors that could lead to an upgrade of the ratings include a significant amount of loan paydowns or amortization, an increase in the pool's share of defeasance or an improvement in pool performance.

Factors that could lead to a downgrade of the ratings include a decline in the performance of the pool, loan concentration, an increase in realized and expected losses from specially serviced and troubled loans or interest shortfalls.

METHODOLOGY UNDERLYING THE RATING ACTION

The methodologies used in this rating were "Moody's Approach to Rating U.S. CMBS Conduit Transactions" published in September 2000 and "Moody's Approach to Rating CMBS Large Loan/Single Borrower Transactions" published in July 2000. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

DESCRIPTION OF MODELS USED

Moody's review used the excel-based CMBS Conduit Model v 2.64, which it uses for both conduit and fusion transactions. Conduit model results at the Aa2 (sf) level are driven by property type, Moody's actual and stressed DSCR, and Moody's property quality grade (which reflects the capitalization rate Moody's uses to estimate Moody's value). Conduit model results at the B2 (sf) level are based on a paydown analysis using the individual loan-level Moody's LTV ratio. Moody's may consider other concentrations and correlations in its analysis. Based on the model pooled credit enhancement levels of Aa2 (sf) and B2 (sf), the required credit enhancement on the remaining conduit classes are either interpolated between these two data points or determined based on a multiple or ratio of either of these two data points. For fusion deals, Moody's merges the credit enhancement for loans with investment-grade credit assessments with the conduit model credit enhancement for an overall model result. Moody's incorporates negative pooling (adding credit enhancement at the credit assessment level) for loans with similar credit assessments in the same transaction.

Moody's uses a variation of Herf to measure the diversity of loan sizes, 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. The pool has a Herf of 11 compared to 20 at Moody's last review.

When the Herf falls below 20, Moody's uses the excel-based Large Loan Model v 8.7 and then reconciles and weights the results from the conduit and large loan models in formulating a rating recommendation. The large loan model derives credit enhancement levels based on an aggregation of adjusted loan-level proceeds derived from Moody's loan-level LTV ratios. Major adjustments to determining proceeds include leverage, loan structure, property type and sponsorship. Moody's also further adjusts these aggregated proceeds for any pooling benefits associated with loan level diversity and other concentrations and correlations.

DEAL PERFORMANCE

As of the April 15, 2014 distribution date, the transaction's aggregate certificate balance has decreased by 94% to $62.7 million from $1.0 billion at securitization. The certificates are collateralized by 17 mortgage loans ranging in size from less than 1% to 8% of the pool, with the top ten loans constituting 49% of the pool. Three loans, constituting 45% of the pool, have defeased and are secured by US government securities.

Three loans, constituting 12% of the pool, are on the master servicer's watchlist. The watchlist includes loans that meet certain portfolio review guidelines established as part of the CRE Finance Council (CREFC) monthly reporting package. As part of Moody's ongoing monitoring of a transaction, the agency reviews the watchlist to assess which loans have material issues that could affect performance.

Five loans have been liquidated from the pool, resulting in an aggregate realized loss of $9.5 million (for an average loss severity of 34%). Four loans, constituting 21% of the pool, are currently in special servicing. The largest specially serviced loan is the Tower Marketplace Center Loan ($4.3 million -- 6.9% of the pool), which is secured by a 127,876 square foot (SF) shopping center located in Raleigh, North Carolina. The property was built in 1983 and most recently renovated in 2001. The loan transferred to special servicing in October 2013 due to monetary default and matured in January 2014. Hamricks (40,600 SF, 32% NRA), an anchor tenant, vacated at its lease expiration in August 2013. The property was 45% leased as of September 2013 compared to 72% at Moody's prior review. Foreclosure was filed in January 2014.

The second largest specially serviced loan is the Square Lake Park Office Building Loan ($3.9 million -- 6.2% of the pool), which is secured by a 40,000 SF office building located in Bloomfield Hills, Michigan. The loan is in special servicing due to maturity default, after maturing in November 2013. The loan was foreclosed in March 2014 but will not technically be REO until September 2014 following Michigan's redemption period.

The remaining two specially serviced loans are secured by office and retail properties. Moody's estimates an aggregate $5.7 million loss for the specially serviced loans (44% expected loss on average).

Moody's full or partial year 2013 operating results for 91% of the pool. Moody's weighted average conduit LTV is 64% compared to 73% at Moody's last review. Moody's conduit component excludes loans with credit assessments, defeased and CTL loans, and specially serviced and troubled loans. Moody's net cash flow (NCF) reflects a weighted average haircut of 12% to the most recently available net operating income (NOI). Moody's value reflects a weighted average capitalization rate of 9.9%.

Moody's actual and stressed conduit DSCRs are 1.22X and 1.77X, respectively, compared to 1.28X and 1.48X at the last review. Moody's actual DSCR is based on Moody's NCF and the loan's actual debt service. Moody's stressed DSCR is based on Moody's NCF and a 9.25% stress rate the agency applied to the loan balance.

The top three conduit loans represent 20% of the pool balance. The largest loan is the McKinleyville Apartments Loan ($4.8 million -- 7.6% of the pool), which is secured by a 164-unit multifamily apartment complex in McKinleyville, California. The property was 99% leased as of December 2013, the same as at Moody's prior review. Moody's LTV and stressed DSCR are 57% and 1.62X, respectively, same as at Moody's prior review.

The second largest loan is the Cleona Square Shopping Center Loan ($3.9 million -- 6.2% of the pool), which is secured a 111,689 SF retail center located in Cleona, Pennsylvania. The property was 90% leased as of September 2013 compared to 95% at Moody's prior review. Performance has declined as a result of the drop in occupancy. The loan is fully amortizing. Moody's LTV and stressed DSCR are 87% and 1.16X, respectively, compared to 68% and 1.47X at the last review.

The third largest loan is the Centennial Valley II Loan ($3.6 million -- 5.7% of the pool), which is secured by a 144-unit multifamily property located in Faulkner, Arkansas. The property was 92% leased as of December 2013 compared to 99% at last review. Moody's LTV and stressed DSCR are 67% and 1.37X, respectively, compared to 69% and 1.33X at the last review.

REGULATORY DISCLOSURES

For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions of the disclosure form.

Moody's did not receive or take into account a third-party assessment on the due diligence performed regarding the underlying assets or financial instruments related to the monitoring of this transaction in the past six months.

The analysis includes an assessment of collateral characteristics and performance to determine the expected collateral loss or a range of expected collateral losses or cash flows to the rated instruments. As a second step, Moody's estimates expected collateral losses or cash flows using a quantitative tool that takes into account credit enhancement, loss allocation and other structural features, to derive the expected loss for each rated instrument.

Moody's did not use any stress scenario simulations in its analysis.

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this rating action, and whose ratings may change as a result of this rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Tarun Bhan
Associate Analyst
Structured Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Sandra Ruffin
VP - Senior Credit Officer
Structured Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's Upgrades Seven, Affirms Two, Downgrades One Class of JPMCC 2004-C1
No Related Data.
© 2015 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

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