Fitch Maintains 1 Class of COMM Mortgage Trust 2006-C7 on Rating Watch Negative; Affirms 16 Classes

NEW YORK--()--Fitch Ratings maintains one class of COMM Mortgage Trust commercial mortgage pass-through certificates series 2006-C7 on Rating Watch Negative, and affirms 16 classes. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The largest loan in the pool, 700 South Flower Plaza (7.3%), is secured by a 32 story, mixed-use (office/retail) property totaling 1.8 million square feet (sf), consisting of 727,925 sf of office space, a 240,000 sf Macy's Dept. store, a Sheraton Hotel (495 rooms) and 115,000 sf of retail and 2,000 parking spaces located in the Los Angeles, CA CBD. All parts of the property serve as collateral to the loan, with the exception of the Sheraton Hotel. Property performance originally declined due to Bank of NY vacating their space in March 2012. More recently, Chicago Title Co. vacated at their lease expiration in February 2014. Currently, the largest three tenants are Macy's (24% of net rentable area [NRA], rated 'BBB' by Fitch), which is currently month to month after their lease expired on Jan. 31, 2015; Lozano Enterprises (5.9%), expiration May 31, 2019; and Farmers Insurance Co. (4%), expiration Jan. 31, 2024. The loan was previously assumed in April 2013, and at that time it was publicly reported the new Sponsor invested $160 million to renovate the shopping, hotel and office components of the complex. Updates on leasing activity, renewals, and property renovations were not available at the time of the review and the master servicer has contacted the borrower for information. The most recent servicer reported debt service coverage ratio as of year-end (YE) 2014 is 0.19x, down from 0.53x at YE 2013. As of YE 2014, the property was 63% occupied compared to 69% at last review.

RATING SENSITIVITIES

Rating Outlooks on classes A-4 and A-1A remains Stable due to increasing credit enhancement resulting from defeasance and continued amortization and paydown. Class A-M maintains its Rating Watch Negative due to the lack of updated information on lease renewals and leasing activity associated with the largest loan in the pool. Should lease renewals not materialize in the next few months, a one category downgrade is expected.

Fitch maintains the following class on Rating Watch Negative:

--$244.7 million class A-M at 'Asf';

Fitch affirms the following classes as indicated:

--$950.3 million class A-4 at 'AAAsf'; Outlook Stable;

--$226.1 million class A-1-A at 'AAAsf'; Outlook Stable;

--$189.7 million class A-J at 'CCsf'; RE 35%;

--$52 million class B at 'Csf'; RE 0%;

--$18.4 million class C at 'Dsf'; RE 0%;

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

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

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

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

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

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

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

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

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

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

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

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

Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 10, 2014 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' (Aug. 4, 2014);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 10, 2014).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria - Effective from 4 August 2014 to 31 March 2015

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

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

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=984690

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
Lisa Cook
Director
+1-212-908-0665
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Christopher Bushart
Senior Director
+1-212-908-0606
or
Media Relations
Sandro Scenga
+1-212-908-0278
New York
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Lisa Cook
Director
+1-212-908-0665
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Christopher Bushart
Senior Director
+1-212-908-0606
or
Media Relations
Sandro Scenga
+1-212-908-0278
New York
sandro.scenga@fitchratings.com