Fitch Ratings has placed nine classes of Credit Suisse First Boston Mortgage Securities Corp., series 2003-CK2 on Rating Watch Negative due to expected losses and potential shortfalls associated with loans in special servicing (10.8%) as well as the potential for adverse selection with only 73 non-defeased loans remaining in the pool. The classes will remain on Rating Watch Negative until additional details on the workouts become available.
The two largest specially serviced loans in the pool are 2300 Imperial Building (3.9%) and Michigan Equity U Portfolio (3.7%).
2300 Imperial Building consists of a 157,225 square foot (sf) office in El Segundo, CA. The loan transferred to the special servicer in November 2009 for imminent default. Occupancy at the property decreased to 48.2% when Boeing (81,418 sf, 51.8% NRA, 59.6% EGI, $37.20/sf) vacated at the June 30, 2008 lease end date. Occupancy has remained below 50% since June 2008. The borrower continues to face difficulty in leasing the available space and cites the soft market conditions as the primary reason for the property's poor performance.
Michigan Equity U Portfolio consists of a 16-property office portfolio, totaling 340,065 sf and located in Lansing, MI. The loan has been in special servicing since May 2008 after several unauthorized ownership transfers had occurred. Although the special servicer negotiated a loan modification with the borrower in the first quarter 2009 (1Q09), members of the borrowing entity subsequently did not agree to the terms of the modification. The special servicer has decided to pursue foreclosure, resulting in an increase of Fitch expected losses since Fitch's last rating action.
Fitch has placed the following classes on Rating Watch Negative:
--$12.4 million class F 'AAA';
--$19.8 million class G 'AAA';
--$14.8 million class H 'AA';
--$17.3 million class J 'A+';
--$17.3 million class K 'BBB+'
--$4.9 million class L 'BBB';
--$13.6 million class M 'BB'
--$6.2 million class N 'B+';
--$4.9 million class O 'B'.
Additional information is available at 'www.fitchratings.com'.
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or
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