Fitch Upgrades 1 Classes of MSDW 2001-TOP1

CHICAGO--()--Fitch Ratings has upgraded one class and affirmed four classes of Morgan Stanley Dean Witter Capital I Trust (MSDW) commercial mortgage pass-through certificates series 2001-TOP1. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrade is a result of increased credit enhancement (CE) to the senior class due to paydown from maturing loans and principal amortization, as well as limited near-term expected losses. The pool has experienced $27.5 million (2.4% of the original pool balance) in realized losses to date. Of the original 166 loans, 14 remain, each of which matures in 2015 (47.7%), 2016 (1.1%) or 2020 (51.2%). Fitch has designated three loans (31.9%) appearing on the master servicer's watchlist as Fitch Loans of Concern. There are no specially serviced loans.

As of the March 2014 distribution date, the pool's aggregate principal balance has been reduced by 98.2% to $21.1 million from $1.16 billion at issuance. Since last review, the pool balance has been reduced by 44%, or $16.7 million, mostly due to the payoff at maturity of two loans. Per the servicer reporting, two loans (5.4% of the pool) are defeased. Interest shortfalls are currently affecting classes J through N.

The largest loan in the pool (37.9%) is a 120,000 square foot (sf) office property located in Raleigh, NC on N.C. State University's Centennial Campus. At origination, the property was fully leased by Lucent Technologies under a 20 year lease expiring in June 2020. In 2002, Lucent subleased the entire space to Red Hat, Inc., which occupied the property as their corporate headquarters prior to relocating to downtown Raleigh in June 2013. The Sponsor has confirmed that a new sublease has been obtained for the entire property from LexisNexus, with an effective lease date of July 2014. While single tenant risk exists, Fitch considered the property's position in the submarket to be stable given the concentration of similar tenants in the campus area. Per the year-end 2012 rent roll, the base rent under the Lucent lease was approximately 18% below current asking rents in the submarket. Market vacancy as of year-end 2013 for Class B/C office space is reported at 13.3% per REIS. The servicer reported debt service coverage ratio (DSCR) as of year-end 2012 is 2.16x. The loan matures in April 2015.

The second largest loan (26.9%) in the pool is secured by an 83,013 sf office property located in Eden Prairie, MN, in the Minneapolis-St. Paul MSA. In April 2012, the property became vacant after the single tenant terminated its lease and vacated the property. In August 2012, the property was restored to 100% occupancy after two new tenants, Coram Inc. and Starkey Laboratories Inc. signed new leases through November 2017 and November 2018, respectively. Fitch analyzed the March 2013 cash flow and modeled a year-end 2013 projected DSCR of 1.33x, an increase from 0.18x at year-end 2012. The loan matures in December 2020.

RATING SENSITIVITIES

Class G is assigned Rating Outlook Stable as the credit enhancement remains high, continued paydown is expected and recovery estimates on the remaining pool are high. However, additional upgrades are not projected due to the increasing concentration of the remaining assets in the pool, the binary risk associated with the limited number of tenants in the two largest loans, as well as the lease maturities prior to loan maturities. Further rating changes are not anticipated for the remaining life of the pool as additional paydown will be offset by further collateral concentration.

Fitch upgrades the following class and assigns Rating Outlooks:

--$11.3 million class G to 'Bsf' from 'CCsf'; Outlook Stable.

Fitch affirms the following classes and revises REs as indicated:

--$8.7 million class H at 'Csf'; RE 100%.

--$1.1 million class J at 'Dsf'; RE 0%;

--$0 class K at 'Dsf'; RE 0%;

--$0 class L at 'Dsf'; RE 0%.

The class A-1, A-2, A-3, A-4, B, C, D, E,F and X-2 certificates have paid in full. Fitch does not rate the class N certificates. Fitch previously withdrew the rating on the class M and 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. 11, 2013 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'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 24, 2013);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 11, 2013).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

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

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724961

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=826649

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings
Primary Analyst:
Valerie Jayson, +1-312-368-3116
Associate Director
Fitch Ratings, Inc.
70 W Madison Street
Chicago, IL 60602
or
Committee Chairperson:
Mary MacNeill, +1-212-908-0785
Managing Director
or
Media Relations:
Sandro Scenga, New York, +1 212-908-0278
sandro.scenga@fitchratings.com

Sharing

Contacts

Fitch Ratings
Primary Analyst:
Valerie Jayson, +1-312-368-3116
Associate Director
Fitch Ratings, Inc.
70 W Madison Street
Chicago, IL 60602
or
Committee Chairperson:
Mary MacNeill, +1-212-908-0785
Managing Director
or
Media Relations:
Sandro Scenga, New York, +1 212-908-0278
sandro.scenga@fitchratings.com