Fitch Downgrades 3 Classes of BSCMSI 2004-TOP 16

NEW YORK--(BUSINESS WIRE)--Fitch Ratings has downgraded three classes and affirmed 12 classes of Bear Stearns Commercial Mortgage Securities Trust 2004-TOP16 commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this press release.

SENSITIVITY/RATING DRIVERS:

The downgrades reflect updated valuations for specially serviced loans and modeled losses for Fitch Loans of Concern. Fitch modeled losses of 1.9% of the remaining pool. Fitch's modeled losses based on the original pool balance is 1.3%, including 1.0% to date. Fitch has designated 11 loans (14.3% of the pool) as Fitch Loans of Concern, which includes three specially serviced assets (9.4%).

As of the January 2013 distribution date, the pool's aggregate principal balance has been reduced by 30.8% to $800.3 million from $1.16 billion at issuance. Per the servicer reporting, 13 loans (16.6% of the pool) are defeased. Interest shortfalls are currently affecting classes L through P.

The largest contributor to expected losses is a loan (0.4% of the pool) secured by a 43,927 square foot (sf) suburban office property located in Fort Washington, PA (north of Philadelphia). The property has been struggling with occupancy issues, with most recent occupancy of 32% as of third quarter 2012 (3Q'12). Vacant space is being marketed by an in-house leasing broker; however, the borrower has indicated that the local leasing market remains stagnant.

The next largest contributor to expected losses is a loan (1.5% of the pool) secured by a 81,204 sf medical office park located in West Seneca, NY (south of Buffalo, NY). Per master servicer, expenses grew 88% from underwriting at issuance to YE 2011 primarily due to higher real estate taxes, repair and maintenance, and utilities. DSCR and occupancy were 0.70x and 84%, respectively, as of 3Q'12.

The Congress Center Office Development, a 524,784 sf office building located in Chicago, IL, is the largest loan in the pool (8.9%) and currently in special servicing. However, per the special servicer the loan has recently been modified, including an assumption by a new borrower and extended maturity and interest-only periods.

Fitch downgrades the following classes as indicated:

--$11.6 million class G to 'Bsf' from 'BBsf', Outlook Negative;

--$4.3 million class K to 'CCsf' from 'CCCsf', RE 0%;

--$21,364 class N to 'Dsf' from 'Csf', RE 0%.

Fitch affirms the following classes as indicated:

--$15.8 million class A-5 at 'AAAsf', Outlook Stable;

--$676.1 million class A-6 at 'AAAsf', Outlook Stable;

--$20.2 million class B at 'AA+sf', Outlook Stable;

--$13 million class C at 'AAsf', Outlook Stable;

--$13 million class D at 'Asf', Outlook Stable;

--$15.9 million class E at 'BBBsf', Outlook Stable;

--$10.1 million class F at 'BBsf', Outlook Stable;

--$10.1 million class H at 'CCCsf', RE 95%;

--$2.9 million class J at 'CCCsf', RE 0%;

--$5.8 million class L at 'CCsf', RE 0%;

--$1.4 million class M at 'Csf', RE 0%;

--$0 class O at 'Dsf', RE 0%.

The class A-1, A-2, A-3 and A-4 certificates have paid in full. Fitch does not rate the class P certificates. Fitch previously withdrew the rating on the interest-only class X-1 certificates.

Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 18, 2012 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at 'www.fitchratings.com' under the following headers:

Structured Finance >> CMBS >> Criteria Reports

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (June 6, 2012);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 18, 2012).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679923

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=696969

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