Fitch Affirms CSMC 2007-C1; Revises Outlooks for Classes A-3 & A-1-A to Stable

Fitch Ratings affirms 24 classes of Credit Suisse Commercial Mortgage Trust (CSMC), series 2007-C1 commercial mortgage pass-through certificates and revises the Rating Outlook to Stable from Negative on classes A-3 and A-1-A. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The affirmations are based on the overall stable to improved performance of the underlying collateral pool relative to the previous rating action. Fitch modeled losses of 17.44% for the remaining pool; expected losses as a percentage of the original pool balance are at 18.59%, including losses already incurred to date. Fitch has designated 85 loans (56.2%) as Fitch Loans of Concern, which includes 16 specially serviced loans (8.26%).

As of the January 2013 distribution date, the pool's aggregate principal balance has been reduced by approximately 22.6% to $2.60 billion from $3.37 billion at issuance, due to a combination of paydown (16.3%) and realized losses (6.3%). Interest shortfalls totaling $57.9 million are affecting classes T through A-J. Since Fitch's previous rating action, approximately 8.5%, or $285.8 million, of the original balance has paid down.

RATINGS SENSITIVITY

The revision of the Outlook for classes A-3 and A-1-A to Stable is the result of the slight improvement in Fitch expected losses, including better than expected resolutions of specially serviced assets. Additionally, the pool has experienced paydown from prior modified loans where Fitch modeled losses on loans with B notes. The B notes had minimal losses incurred. The largest contributor to Fitch's modeled losses is the City Place (5.12% of the pool) loan. The loan is collateralized by a 731,886 square foot (sf) mixed use center located in West Palm Beach, FL. The loan was transferred to the special servicer in April 2010 and a modification consisting of an A/B note structure was completed in January of 2012. Occupancy has declined to 89% from 95% at issuance. However, the tenant roster is stable for the next few years with limited lease roll over until 2015. Additionally, several major retail tenants have renewed leases over the past 12 months, and the sponsor is making capital improvements.

The second largest contributor to modeled losses is Savoy Park (7.2%). The loan is secured by a multifamily complex consisting of 1,802 units, located in the Harlem neighborhood of New York, NY. The loan was previously in special servicing beginning in July 2010 due to imminent default. The loan was assumed by the mezzanine lender and a loan modification was completed in 2012. The modification includes an A/B note split of $160 million A note and $50 million B note, and extension to Dec. 11, 2017. Per the master servicer, the complex's occupancy rate is 95%. The loan has returned to the master servicer and remains current.

The third largest contributor to Fitch's model losses is the 717 N. Harwood Street (2.46%), a 828,314 sf office building located in the central business district of Dallas, TX. The real estate owned asset has been with the special servicer since April 2010. The property has consistently underperformed its competitive set due to the weak office fundamentals in the Dallas CBD submarket. The subject's current vacancy is 51% and the asking rate is $16.50 psf. Fitch expects performance to continue to decline as the largest tenant KPMG, 31.7% of the net rentable area, has indicated their intention to vacate upon their lease expiration in June 2015. A purchase and sale agreement has been executed for the asset and the special servicer is anticipating that the transaction will close during the first quarter of 2014.

Fitch affirms the following classes and revises Outlooks as indicated:

--$44.1 million class A-AB at 'AAAsf'; Outlook Stable;

--$738.5 million class A-3 at 'AAAsf'; Outlook to Stable from Negative;

--$1 billion class A-1A at 'AAAsf'; Outlook to Stable from Negative;

--$212.1 million class A-M at 'Bsf'; Outlook Negative;

--$125 million class A-MFL at 'Bsf'; Outlook Negative;

--$286.6 million class A-J at 'CCCsf'; RE0%;

--$25.3 million class B at 'CCsf'; RE 0%;

--$37.9 million class C at 'Csf'; RE 0%;

--$33.7 million class D at 'Csf'; RE 0%;

--$21.1 million class E at 'Csf'; RE 0%;

--$29.5 million class F at 'Csf'; RE 0%;

--$26.5 million class G at 'Dsf'; RE 0%;

Classes H, J, K, L, M, N, O, P, Q, and S remain at 'Dsf' due to realized losses. Classes A-1 and A-2 have paid in full. Fitch has previously withdrawn the ratings in the interest-only classes A-SP and A-X.

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=818731

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Fitch Ratings, Inc.
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Jay Bullie, [phone]
Associate Director
Fitch Ratings, Inc.
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Chicago, IL 60602
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