Ratings

The transaction exhibits the following strengths:

• One hundred and ninety-seven loans (100.0%) have borrowers that are structured as special-purpose entities (SPEs). In addition, 24 of the loans (54.9%) have bankruptcy-remote borrowers with nonconsolidation opinions and independent directors;
• Twenty-one loans, representing 20.6% of the pool, are secured by multiple cross-collateralized and/or cross-defaulted assets; and
• The average quality score for the properties securing the mortgages in the trust is 2.81, an above-average score on Standard & Poor's scale of 1 (highest) to 5 (lowest).

This transaction exhibits the following concerns and mitigating factors:

• The pool exhibits loan concentration, as the top 10 loans/sponsors represent 46.9% of the pool balance. However, three of the top 10 loans (including groups of related loans), representing 14.3% of the pool, are secured by multiple cross-collateralized and/or cross-defaulted properties. In addition, all (46.9%) of the top 10 borrowers are structured as bankruptcy-remote SPEs;
• The pool is concentrated geographically, with 69.0% of the mortgaged properties located in eight states. The largest concentrations are in New York (20.4%), California (18.5%; 10.5% in Southern California and 8.0% in Northern California), Virginia (5.9%), Tennessee (5.7%), Texas (5.4%), Maryland (4.9%), Hawaii (4.1%), and Arizona (4.1%). The remaining assets are dispersed throughout 33 states and Puerto Rico, with no other state concentration exceeding 4.0% of the pool balance;
• Loans representing 34.8% of the pool balance have existing additional debt, and loans representing 25.2% the pool balance permit the borrower to incur future additional debt. All future debt is conditional upon meeting specific DSC and LTV hurdles, requires lender consent, and/or is subject to subordination and standstill agreements. In addition, all existing and future additional debt has been factored into the subordination levels;
• The pool has asset concentrations in relatively less stable asset classes (47.4% of the pool balance), including office properties (33.9%; including 2.2% medical office), hotel (8.9%), unanchored retail (2.1%), self-storage (1.3%), and mixed-use (1.2%). The underwriting assumptions and capital structures for these loans take into account the property type, and the credit support levels for the trust pool take into account asset class concentrations; and
• Of the loans, 71 (67.1%) provide for interest-only (IO) payments throughout their respective terms. An additional 83 loans (25.4%) have IO periods.

The pool contains 197 conventional fixed-rate loans secured by liens on 291 properties. By property type, the pool has the following composition: office (33.9%, including 2.2% medical office), multifamily (27.2%), retail (17.1%), hotel (8.9%), warehouse (5.1%), manufactured housing (4.6%), self-storage (1.3%), mixed-use (1.2%), and industrial (0.7%).

Lockboxes are in place for 57 loans, representing 64.2% of the pool balance. Thirty loans (40.6%) have hard lockboxes, 21 loans (4.4%) have springing lockboxes that are triggered by certain conditions, and six loans (19.3%) have soft lockboxes.

Monthly real estate tax escrows have been established for 154 loans (45.8%), monthly insurance premium escrows have been established for 122 loans (50.3%), and monthly capital reserves have been established for 126 loans (46.6%).

A reserve for existing deferred maintenance has been established for 52 loans (20.2%) for which remediation of existing deferred maintenance items is necessary.

Up-front and/or ongoing tenant improvement and leasing commission (TI/LC) reserves are required for loans representing 41.0% of the balance of the retail, office, and industrial loans in the pool.

Thirty-two loans (13.1%) are secured by properties leased to single tenants. Seventeen of these properties, representing 79.7% of single tenant properties, have leases that expire after the loan maturity. Fourteen of these single-tenant properties, representing 90.2% of single tenant properties,are occupied by a tenant rated investment-grade by Standard & Poor's.

The pool consists of properties in 41 states and Puerto Rico. The largest concentrations are in New York (20.4%), California (18.5%; 10.5% in Southern California and 8.0% in Northern California), Virginia (5.9%), Tennessee (5.7%), Texas (5.4%), Maryland (4.9%), Hawaii (4.1%), and Arizona (4.1%). The remaining assets are dispersed throughout 33 states and Puerto Rico, with no other state concentration exceeding 4.0% of the pool balance.

German American Capital Corp. contributed 37 loans (43.0%), Bank of America N.A. contributed 53 loans (22.6%), General Electric Capital Corp. contributed 69 loans (18.2%), and Barclays Capital Real Estate Inc. contributed 38 loans (16.2%).

Loans representing 99.8% of the pool balance were originated in the past 12 months. One loan (0.2% of the pool balance) was originated in the past 18 months.

Seventy-one loans (67.1%) are full term IO loans, and 83 loans (25.4%) are partial IO loans.

No loans are structured as hyperamortizing loans.

Based on Standard & Poor's analysis, the pool has a DSC of 1.14x on a weighted average coupon of 5.82%. Standard & Poor's DSC reflects adjustments made to the net cash flow (NCF) of the properties based on the bankers' underwriting, historical, and projected operating statements and the assets' competitive positions in their respective markets.

On a weighted average basis, Standard & Poor's adjusted the NCF of the portfolio downward by 13.0%. This decrease reflects adjustments to rental rates, occupancy levels, operating expenses, capital expenditure reserves, and TI/LC assumptions.

For the pool, Standard & Poor's weighted average beginning LTV is 120.6%, and the ending LTV is 116.9%. The weighted average capitalization rate applied to Standard & Poor's NCF is 8.81%. Capitalization rates are a function of asset type, quality, tenancy, position in the competitive set, and current and future market conditions.

Standard & Poor's inspected assets, representing 61.0% of the total pool, re-underwrote cash flows, and derived asset values for 78.3% of the total pool. The weighted average quality score for the inspected properties was 2.81, an above-average score based on Standard & Poor's scale of 1 (highest) to 5 (lowest).

The largest sponsor is George Gellert and Jared Kushner, the sponsor of the 666 Fifth Avenue loan (5.9%). The five-largest sponsors in the pool represent 25.5% of the total pool balance, and the 10-largest sponsors represent 43.5% of the pool balance. All of the top 10 borrowers (45.9%) are structured as bankruptcy-remote SPEs.

The largest loan in the pool, the 666 Fifth Avenue loan, comprises 5.9% of the pool balance. The top five loans represent 25.6% of the pool balance, and the top 10 loans account for 45.9% of the pool balance. Three of the top 10 loans (14.3%) are secured by multiple cross-collateralized and cross-defaulted properties.

Five loans (2.5%) were made to borrowers with members or affiliates that have previously filed for bankruptcy. All of these loans are structured with SPE borrowers. None of these loans is structured with a cash management feature.

Thirteen loans (9.5%) are secured in whole or in part by a mortgage lien on the borrower's leasehold interest pursuant to a ground lease. All of these loans have ground leases with maturities including extension periods at least 20 years beyond the maturity of the related loan, and all afford the lender notice and cure rights.

Twenty loans (7.5%) are owned by individuals or entities as tenants-in-common (TIC) and generally conform to Standard & Poor's criteria.

The largest loan in the pool, the 666 Fifth Avenue loan, has a trust balance of $249.0 million (5.9% of the pooled trust balance) and a whole-loan balance of $1.215 billion. The whole loan will be divided into eight pari passu notes: the $249.0 million consists of the A-1 and A-2 notes that are included in this transaction, and six additional notes aggregating $966.0 million that will be included in future transactions. The loan will be serviced and administered pursuant to this transaction's PSA.

The fourth-largest loan in the pool, the Skyline Office Portfolio loan, has a trust balance of $203.4 million (4.8% of the pooled trust balance) and a whole-loan balance of $678.0 million. The whole loan consists of a $271.2 million pari passu note that was contributed to the BACM 2007-1 transaction, a $203.4 million pari passu note that was contributed to the JPMCC LDP10 transaction, and the $203.4 million pari passu note that will be contributed to the subject transaction. The Skyline Office Portfolio loan will be serviced and administered pursuant to the BACM 2007-1 PSA.

The eighth-largest loan in the pool, the Four Seasons Resort Maui at Wailea loan, has a trust balance of $175.0 million (4.1% of the pooled trust balance) and a whole-loan balance of $425.0 million. The whole loan consists of a $175.0 million pari passu note that will be contributed to the subject transaction and a $250.0 million pari passu note that was contributed to the CD 2007-CD4 transaction. The Four Seasons Resort Maui loan will be serviced and administered pursuant to the CD 2007-CD4 PSA.

The ninth-largest loan in the pool, the Pacific Shores loan, has a trust balance of $165.9 million (3.9% of the pooled trust balance) and a whole-loan balance of $331.8 million. The whole loan consists of a $165.9 million pari passu note that will be contributed to the subject transaction and a $165.9 million pari passu note that was contributed to the BACM 2007-1 transaction. The Pacific Shores loan will be serviced and administered pursuant to the BACM 2007-1 PSA.

The 11th-largest loan in the pool, the Mall of America loan, has a trust balance of $104.0 million (2.5% of the pooled trust balance) and whole-loan balance of $755.0 million. The whole loan consists of a $345.0 million pari passu note that was contributed to the COMM 2006-C8 transaction, the $306.0 million pari passu note that was contributed to the CD 2007-CD4 transaction, and a $104.0 million pari passu note that will be contributed to this transaction. The Mall of America loan will be serviced and administered pursuant to the COMM 2006-C8 PSA.

The 24th-largest loan in the pool, the Americold Portfolio loan, has a trust balance of $30.0 million (0.7% of the pooled trust balance) and a whole-loan balance of $350.0 million. The whole loan consists of the $30.0 million pari passu note that will be contributed to the subject transaction, a $180.0 million pari passu note that was contributed to the CD 2007-CD4 transaction, a $70.0 million pari passu note that was contributed to the JPMCC 2007-CIBC18 transaction, and one pari passu note of $70.0 million that will be included in a future transaction. The Americold Portfolio loan will be serviced according to the JPMCC 2007-CIBC18 PSA.

Three loans (5.3% of the pool balance) have subordinate B notes. The Enclave loan (4.7%) is structured with a $25.0 million B note. The Clarion LaGuardia Airport Hotel loan (0.4%) is structured with a $2.0 million subordinate B note. Lastly, the Downtown Plaza loan (0.2%) is structured with a $407,000 subordinate B note. These subordinate loans are subject to an intercreditor agreement and are held outside of the trust.

Standard & Poor's believes the relative rights in a bankruptcy are more favorable when a loan is structured as a participation rather than with separate notes.

Loans representing 22.2% of the pool balance have existing additional debt in the form of mezzanine debt, and loans representing 25.2% the pool balance permit the borrower to incur future additional debt.

Sixteen loans, representing 22.2% of the pool balance, have existing mezzanine debt that is secured by a pledge of equity interest in the related mezzanine borrower.

One loan (5.9%) permits the borrower to incur either unsecured or mezzanine debt provided that the existing junior mezzanine debt has been paid in full and subject to several conditions, including satisfying a LTV test and execution of intercreditor and subordination agreements.

One loan (0.2%) permits the borrower to incur future subordinate secured debt subject to several conditions, including satisfying certain LTV and DSC tests and execution of intercreditor and subordination agreements.

Two loans (0.9%) permit the borrower to incur future subordinate unsecured debt.

Twenty-five loans (18.2%) permit the borrower to incur future mezzanine debt subject to several conditions, including satisfying certain DSC and LTV tests and execution of intercreditor and subordination agreements.

All additional debt and the ability to incur additional debt have been factored into the subordination levels.

Loans representing 97.5% of the pool balance have terrorism insurance in place. The loan documents generally require the related borrower to maintain insurance against damage from terrorism and other acts of sabotage. However, the requirements may contain certain qualifications, such as the availability of insurance at commercially reasonable rates and the possibility of the expiration of the Terrorism Risk Insurance Act of 2002, which could prevent terrorism-related coverage from being obtained by the applicable borrower.

Appraisal reports, in conformance with USPAP and FIRREA, were prepared for all of the loans. All but two (0.8%) of the appraisal reports were completed within 12 months of the cutoff date. The remaining reports were completed within 24 months of the cutoff date.

Phase I environmental studies were conducted for all of the mortgaged properties. All but two (0.2%) of the reports were completed within 12 months of the cutoff date. The remaining report was completed within 25 months of the cutoff date.

Phase II assessments were recommended for nine properties (5.4%), of which seven were performed. For three properties (4.1%), no further action was recommended. For three properties (0.9%), an operating and maintenance plan for asbestos was recommended. For one property (0.1%), an up-front escrow of $25,000 was established at closing to remediate an issue identified in the phase II report. For two properties (0.4%), environmental insurance was required in lieu of pending phase II reports.

Independent, licensed engineers prepared engineering reports for all of the mortgaged properties. All but two (0.05%) of the loans had engineering reports prepared during the 12-month period before the cutoff date. The remaining reports were completed within 26 months of the cutoff date.

These reports identified both deferred maintenance items to be corrected immediately and long-term capital expenditure needs. Of the mortgaged properties, 124 (35.3%) were identified as needing immediate repairs. Escrows totaling $5.4 million were established at closing to remediate these items, with these escrows generally representing 125% of the recommended amounts indicated in the reports.

A seismic study was completed for all of the properties located in seismic zones 3 or 4. Two of the properties have a probable maximum loss greater than or equal to 20%. Earthquake insurance was obtained for 76 loans (60.4%), including for one of the properties with a PML greater than 20%. One property, North Valley Self Storage (0.2%), is not required to have earthquake insurance.

Generally, the originators require wind insurance for all properties in coastal areas. The loans secured by properties in Federal Emergency Management Agency-designated flood zones are required to comply with flood insurance regulations. Of the loans, 129 (64.1%) have wind and/or flood insurance in place.

The largest loan in the pool, the 666 Fifth Avenue loan, has a trust balance of $249.0 million (5.9% of the pooled trust balance) and a whole-loan balance of $1.215 billion. The whole loan will be divided into eight pari passu notes: the $249.0 million consists of the A-1 and A-2 notes that are included in this transaction, and six additional notes aggregating $966.0 million that will be included in future transactions. In addition to the first mortgage, there is a $335.0 million senior mezzanine loan and a $200.0 million junior mezzanine loan secured by a pledge of the equity interests of the borrower and subject to a subordination and intercreditor agreement. Provided the junior mezzanine loan has been paid off, the borrower is also permitted to incur future junior mezzanine debt secured by a pledge of the equity interests of the borrower, subject to a LTV test, an acceptable subordination and intercreditor agreement, and rating agency confirmation. The 10-year, fixed-rate, IO loan bears interest at 6.353% and matures in February 2017.

The loan is secured by a first mortgage encumbering the fee interest in 666 Fifth Avenue, a 39-story, 1,549,623-sq.-ft., class A office building located in Midtown Manhattan. Built in 1957 and renovated at a cost of $40.0 million in 1999, the property is located on Fifth Ave. between West 52nd St. and West 53rd St. and comprises 69,087 sq. ft. of retail and storage space, 1,367,545 sq. ft. of office space, 17,478 sq. ft. of parking garage space that includes 90 spaces, and 95,513 sq. ft. of Fifth Ave. retail space. The 95,513 sq. ft. of Fifth Ave. retail space can be released in exchange for the paydown of the existing $335.0 million senior mezzanine loan and a payoff/paydown of the junior mezzanine loan.

As of January 2007, the subject, not including the Fifth Ave. retail space, was 98.3% leased, with tenants paying weighted average rents of $48.99. Table 1 lists the major tenants at the subject.

Table 1

666 Fifth Avenue Major Tenants
Tenant	Standard & Poor's rating	Sq. ft. (as remeasured)	Property NRA (%)	Base rent per sq. ft. ($)	Lease expiration
Citibank N.A.	AA+	365,070	25.1	44.47	August 2007, August 2009, and August 2014
Orrick, Herrington & Sutcliffe	NR	239,464	16.5	44.79	March 2010
Fulbright & Jaworski LLP	NR	139,177	9.6	51.93	December 2016
Vinson & Elkins	NR	73,858	5.1	71.94	December 2010
Phillips Nizer LLP	NR	63,477	4.4	58.35	August 2011
Percentages do not include the Fifth Avenue retail space. NRA—Net rentable area. NR—Not rated.

The sponsors of the bankruptcy-remote SPE borrower are Jared Kushner and George Gellert. Jared Kushner is a principal of the New York division of Kushner Cos. Kushner Cos. is a private real estate organization involved in the ownership, development, redevelopment, and management of single and multifamily housing, commercial, retail, industrial, and hotel properties throughout the Northeast and Mid-Atlantic regions. Headquartered in Florham Park, N.J., with executive offices in Manhattan, the company manages its residential and commercial portfolios through its corporate offices and operating divisions. Principals of the Kushner Cos. are involved in ownership of in excess of 25,000 apartment units; the Kushner Cos.' commercial portfolio consists of nearly 6.5 million sq. ft. of office, industrial, and retail space and thousands of acres of land suitable for development. Properties are located in New Jersey, New York, Pennsylvania, Maryland, and Delaware. George Gellert is a real estate developer and the president and chairman of the board of Atalanta Corp., a food importer and international trading company located in Elizabeth, N.J. The loan is structured with a hard lockbox for cash management.

The following points summarize Standard & Poor's cash flow analysis and assumptions for this loan and do not include the Fifth Ave. retail component:

• Gross potential rent (GPR) was based on leases in place as of January 2007, with consideration given to the appraiser's analysis of market rents;
• Expense reimbursements were based on the tenants' contractual obligations;
• Other income and percentage rent were based on the property's historical performance and contractual amounts;
• A vacancy of 5.0% was assumed;
• Operating expenses, other than property taxes and insurance premiums, were based on the property's historical performance and appraisal estimates;
• Real estate taxes and insurance premium expenses were based on actual amounts;
• A management fee of $1.3 million was assumed;
• Replacement reserves were underwritten at $0.35 per sq. ft.;
• TI expenses were estimated at $40.00 per sq. ft. for new leases and $20.00 per sq. ft. for renewal leases;
• LCs expenses were estimated at 4.0% for new leases and 2.0% for renewal leases;
• TI/LC assumptions were based on the weighted average in-place lease term of 13.1 years, with LC expenses capped at 10 years;
• A 65% renewal probability was assumed for all tenants;
• Based on these assumptions, Standard & Poor's NCF variance was 50.6%;
• Standard & Poor's applied an 8.00% capitalization rate to NCF and gave credit for rent steps for investment-grade tenants, and gave credit for stabilized rent adjustments, resulting in a final value of $996.8 million, or $686 per sq. ft.; and
• The quality score for this asset is 2.50, an above-average score.

This loan exhibits the following strengths:

• The property is well-located on Fifth Ave. between 52nd St. and 53rd St. in desirable Midtown Manhattan, in close proximity to Rockefeller Center and major transportation routes; and
• The property benefits from strong sponsorship and management.

This loan exhibits the following concerns and mitigating factors:

• In addition to the A note, the property is encumbered by $535.0 million of mezzanine financing secured by a pledge of equity interests in the borrowing entity, and the borrower has the ability to incur future junior mezzanine debt subject to the existing junior mezzanine debt being paid off, an LTV test, and rating agency confirmation. The additional debt is subject to subordination and intercreditor agreements, and any future mezzanine debt is subject to DSC and LTV tests, an acceptable subordination and intercreditor agreement, and rating agency confirmation. Standard & Poor's took the loan structure and all additional debt into consideration when sizing the loan's capital structure.

The second-largest loan in the pool, the Wolfchase Galleria loan, has a trust and whole-loan balance of $225.0 million (5.3% of the pool). In addition to the first mortgage, the borrower may incur future mezzanine debt secured by a pledge of the equity interests of the borrower. The 10-year, fixed-rate, IO loan bears interest at 5.6445% and matures in April 2017.

The loan is secured by a first mortgage encumbering the fee interest in 392,400 sq. ft. of in-line space in a 1.27-million sq.-ft. regional mall, which was developed in 1997 and is located in Memphis, Tenn. The subject is located in Shelby County, 15 miles east of the downtown Memphis central business district (CBD). The property includes four noncollateral anchors: Macy's, Sears, Dillard's, and JCPenney, which all own their stores and the underlying land. The anchor tenants are detailed in table 2.

Table 2

Wolfchase Galleria Anchor Tenants
Tenant	Standard & Poor's rating	Occupied sq. ft.	% of collateral NRA	Base rent per sq. ft. ($)	Estimated Sales per sq. ft. or screen ($)	Lease expiration
Macy's	BBB	252,720	N/A	-	229	-
Dillard's	BBB	203,943	N/A	-	173	-
Sears	BB+	160,938	N/A	-	164	-
JCPenney	BBB-	144,047	N/A	-	226	-
Malco Theatres	NR	31,049	7.9	13.53	136,616	February 2017
NRA—Net rentable area. N.A.—Not applicable. NR—Not rated.

Overall, the subject is 96.1% occupied. Historical occupancy at the subject has been 97.0%, 100.0%, 99.0% and 99.0% in 2003, 2004, 2005, and 2006, respectively. The in-line tenants are paying average in-line rents of $38.61 per sq. ft. For 2006, in-line shop sales were $404 per sq. ft., with a weighted average occupancy cost of 14.5%. Table 3 lists the major in-line tenants.

Table 3
Wolfchase Galleria In-Line Tenants
Tenant	Standard & Poor's rating	Occupied sq. ft.	Property NRA (%)	Base rent per sq. ft. ($)	Sales per sq. ft. ($)	Lease expiration
The Finish Line	NR	21,912	5.6	19.99	261	February 2012
Victoria's Secret	BBB	13,300	3.4	36.00	760	February 2009
Pottery Barn*	NR	10,413	2.7	-	179	February 2009
The Gap	BB+	9,713	2.5	37.05	368	April 2011
Abercrombie & Fitch	NR	8,583	2.2	23.48	413	February 2009
FYE	NR	8,331	2.1	20.51	268	February 2008
*Pottery Barn pays percentage rent. NRA—Net rentable area. NR—Not rated. N/A-Not applicable.

The sponsor of the bankruptcy-remote SPE borrower is Simon Property Group L.P. (Simon, 'BBB+'). Simon (NYSE: SPG) is engaged in the ownership, operation, leasing, management, acquisition, expansion, and development of real estate properties. Its real estate portfolio consists primarily of regional malls and community shopping centers. Simon owns or holds an interest in 285 properties in the U.S., consisting of approximately 201 million sq. ft. of gross leaseable area (GLA) in 38 states and Puerto Rico, and interests in shopping centers in France, Italy, Poland, Japan, Mexico, Portugal, and Canada. Simon is the largest publicly traded real estate company in North America. The subject is managed by Simon Management Associates LLC, an affiliate of the borrower. The loan is structured with a hard lockbox for cash management.

The following points summarize Standard & Poor's cash flow analysis and assumptions for this loan:

• GPR was based on leases in place as of February 2007, with vacant space underwritten at the weighted average in-place rents;
• Vacancy was underwritten at 5.0% for all tenants except the theater tenant, which was underwritten at 15.0% vacancy. The property is currently 3.9% vacant;
• Expense reimbursements were based on the tenants' contractual obligations and the property's historical performance;
• Percentage rent, other income, marketing income, and specialty leasing income were based on historical performance;
• Operating expenses, including real estate taxes and insurance premiums, were based on the property's historical performance;
• A management fee of 5.0% of effective gross income (EGI) less reimbursements was assumed;
• TI expenses for in-line tenants were assumed to be $15.00 per sq. ft. for new leases and $5.00 per sq. ft. for renewal leases. TI expenses for the theater were assumed to be $6.00 per sq. ft. for a new lease and $3.00 per sq. ft. for a renewal lease;
• LC expenses were assumed to be 4.00% for new leases and 2.00% for renewal leases;
• TI/LCs assumptions were based on the in-place weighted average lease terms of 11.2 years and 20.0 years for in-line and theater tenants, respectively, with LC expenses capped at 10 years;
• A 65.0% renewal probability was assumed for all tenants except the theater tenant, for which a 60.0% renewal probability was assumed;
• Replacement reserves were estimated at $0.25 per sq. ft. of collateral net rentable area (NRA);
• Based on these assumptions, Standard & Poor's NCF variance was 6.81%;
• Standard & Poor's assumed a capitalization rate of 8.00%, which yielded a total value of $183.7 million, or $468 per sq. ft.; and
• The quality score for this asset is 2.75, an above-average score.

This loan exhibits the following strengths:

• The property has demonstrated strong performance with in-line sales of $404 per sq. ft. and average occupancy costs of 14.5%; and
• The property benefits from strong sponsorship and management.

This loan exhibits the following concern and mitigating factors:

• The borrower has the ability to incur future mezzanine debt secured by a pledge of the equity interests in the borrower. However, any future mezzanine debt will be subject to an intercreditor agreement as well as 1.10x DSC and 80% LTV tests. Further, Standard & Poor's took the loan structure and all additional debt into consideration when determining subordination levels for the deal.

The third-largest loan in the pool, the Manhattan Apartment Portfolio loan, has a trust and whole-loan balance of $204.0 million (4.8% of the pooled trust balance). The five-year, fixed-rate IO loan bears interest at 6.15% and matures in May 2012.

The Manhattan Multifamily Portfolio is a comprised of 1,083 apartment units and two retail units in 36 apartment buildings located in the Upper West Side of Manhattan. The properties were developed between 1900 and 1940, and consist mostly of five- to –six-story buildings containing 10 to 66 units. Nineteen of the buildings are "walk-ups" without an elevator, and 17 have elevator service.

As of January 2007, the properties were 96.9% leased at rents estimated to be 56% below market.

Tables 4, 5, and 6 below detail the portfolio's units.

Table 4

Manhattan Multifamily Portfolio Overview
Building locations	Building count	Unit count
Upper West Side between 100th St. and 108th St.	21	484
Morningside Heights between 1113th St. and 115th St.	4	104
West Harlem between 127th St. and 139th St.	6	311
Hamilton Heights between 147th. and 148th St.	2	53
Washington Heights between 156th St. and 161th St.	3	131
Totals/averages	36	1083

Table 5

Manhattan Multifamily Portfolio Rent Roll Summary
Unit type	Unit count	Avg. rent per unit per mo. ($)
Studio	25	965
One bedroom	229	952
Two bedroom	467	1,036
Three bedroom	246	951
Four bedroom and five bedroom	108	1,047

Table 6

Manhattan Multifamily Portfolio Rent Summary
Rent type	Unit count	Avg. rent per unit per mo. ($)
Rent stabilized	882	1,034
Rent controlled	113	311
Commercial units	10	2,361
Market	35	2,394
Section 8	26	1,000
Superintendent	20	N.A.

Rent-stabilized units may be deregulated if the monthly rent of the unit is $2,000 or greater upon vacancy. The borrower has already spent $7.27 million ($6,713 per unit) on building and unit renovations since acquiring the portfolio in 2005. To make the units attractive to prospective tenants seeking market rate housing, the borrower will spend approximately $23,000 per unit on improvements, which will include new hardwood flooring throughout the apartments, and gut renovations to the kitchens and bathrooms involving installation of new cabinets, countertops, and fixtures. The renovation will also entail major capital improvement programs, which will include electrical upgrades, lobby and corridor renovations, elevator modernization, new security systems, and plumbing upgrades. The borrower intends to increase property NOI by renovating and re-leasing an average of 88 units per year (10% of total units per year). A $38.0 million reserve ($43,084 per unit) was established to partially cover renovation costs and debt service shortfalls during the term of the loan.

The sponsors of the bankruptcy-remote SPE borrower are The Pinnacle Group and the Praedium Group. The Pinnacle Group currently has ownership and management interests in 100 apartment buildings totaling 20,000 units, located mostly in New York City. The company's founder, Joel Wiener, has 50 years of experience with acquisition, development, and management of residential and commercial real estate. The Pinnacle Group is an experienced owner and operator of New York City rent-stabilized apartment buildings. The Praedium Group is an institutional real estate investment management company specializing in opportunistic value-added investments. Founded in 1991, Praedium has launched six commingled funds totaling $6 billion to date. The funds' institutional investors include public and corporate pension funds, financial institutions, insurance companies, and endowments. Praedium to date has acquired 45,000 apartment units, 18 million sq. ft. of office, 7 million sq. ft. of retail, 7 million sq. ft. of industrial, and 9 million sq. ft. of mixed-use properties, located in 28 states and Washington, D.C. The property is managed by an affiliate of the borrower. The loan is structured with a soft lockbox for cash management.

The following points summarize Standard & Poor's underwriting assumptions for this loan:

• Standard & Poor's bifurcated the underwriting analysis due to below-market rents at the properties. Cash flow was underwritten and DSC calculated following an as-is approach; however, Standard & Poor's utilized a stabilized approach to derive the ultimate value of the properties;
• For the as-is approach, revenues were based on the in-place leases as of January 2007; for the stabilized approach vacated apartment units were assumed to roll to estimated stabilized rents of $2,200 per unit;
• For the as-is approach, a 3% vacancy rate was assumed. For the stabilized approach, a 5% vacancy rate was assumed for stabilized market rate units, and a 3% vacancy rate was assumed for below-market stabilized units;
• Operating expenses, other than property taxes, were based on historical levels and were grown by 3% per year;
• Real estate tax expenses were based on the current level and were grown by 3% per year;
• A management fee of 4.0% of EGI was assumed;
• Capital reserves were assumed to be $250 per unit;
• Standard & Poor's stabilized NCF using a 5% annual conversion rate of units to market rents over a period of 10 years, and assumed additional units would convert to market rents through tenant buyouts or removal of illegal tenants at an initial rate of 5% per year, tapering down over time;
• Renovation costs were assumed to average $49,297 per unit for vacated units that are leased up to market rents over a 10-year period;
• Standard & Poor's applied an 8.50% discount rate over an assumed 10-year holding period to its annual NCF assumptions, subtracting estimated conversion and tenant buyout costs in excess of the up-front reserve, and also subtracting the estimated debt service deficit, based both on the actual constant through the loan term and an 8.75% stressed constant thereafter, arriving at a value of $156.0 million ($143,806 per unit), and;
• The quality scores for the properties that were inspected ranged from 3.25 to 3.50, with an average of 3.48, which is a below-average score.

This loan exhibits the following strengths:

• The loan is secured by 36 cross-collateralized and cross-defaulted multifamily properties;
• The properties will benefit from an ongoing renovation designed to bring rents up to market; and
• The property benefits from strong sponsorship and management with experience in owning and operating rent stabilized multifamily assets in New York City.

This loan exhibits the following concerns and mitigating factors:

• The properties are relatively old, having been built between 1900 and 1930. However, the borrower is planning to gut renovate all vacated units and make common area building improvements.

The fourth-largest loan in the pool, the Skyline Office Portfolio loan, has a trust balance of $203.4 million (4.8% of the pooled trust balance) and a whole-loan balance of $678.0 million. The whole loan consists of the $203.4 million pari passu note that will be contributed to the subject transaction, a $271.2 million pari passu note that was contributed to the BACM 2007-1 transaction, and a $203.4 million pari passu note that was contributed to the JPMCC LDP10 transaction. The 10-year, IO, fixed-rate loan bears interest at 5.743% and matures in February 2017.

The Skyline Office Portfolio loan is secured by a first fee mortgage encumbering an office complex, consisting of eight distinct cross-collateralized and cross-defaulted office buildings with a total of 2,566,783 sq. ft., located in Falls Church, Va., approximately 10 miles from downtown Washington, D.C. Constructed between 1972 and 2001, the class A properties have been renovated with approximately $30 million ($11.69 per sq. ft.) invested since 2001 to upgrade building facades, lobbies, restrooms, elevators, corridors, and outdoor spaces. The weighted average occupancy for the portfolio is 97.1%, and individual property occupancy levels range from 90%-100%. Benefiting from accessibility to I-395, downtown Washington, D.C., Reagan National Airport, and the Pentagon, the buildings cater to the U.S. Government ('AAA'), which is the largest tenant at the complex (1,415,872 sq. ft.; 55.4% of GLA; 54.2% of base rent). Governmental agencies (or General Services Administration (GSA) tenants) at the subject include the Department of Defense, Department of Justice, Army Surgeon General, Social Security Administration, IRS, and Department of Homeland Security, with the Department of Defense having the largest presence (846,971 sq. ft.; 33% of GLA). All of these GSA leases, with one exception (148,000 sq. ft.; 0.6% of GLA), are not cancelable and are not subject to annual appropriations.

The properties included in the portfolio are summarized in table 7.

Table 7

Skyline Office Portfolio
Property	Year built	Allocated loan balance	GLA	Current occupancy (%)
One Skyline Tower	1987	40,410,000	473,350	95.8
Seven Skyline Place	2001	30,240,000	402,824	100.0
Six Skyline Place	1985	24,570,000	308,533	97.4
Five Skyline Place	1983	23,610,000	298,468	96.4
One Skyline Place	1972	21,990,000	275,492	90.0
Four Skyline Place	1982	21,150,000	267,651	98.8
Two Skyline Place	1979	21,000,000	270,679	97.9
Three Skyline Place	1980	20,430,000	269,786	100.0
Total	-	203,400,000	2,566,783	97.1
GLA—Gross leaseable area. N/A—Not applicable.

The four-largest tenants in the portfolio are summarized in table 8.

Table 8

Skyline Office Portfolio - Largest Tenants
Tenant	S&P rating	Total tenant sq. ft.	% of total sq. ft.	Rent per sq. ft. ($)	Lease expirations
GSA/Dept. of Defense	AAA	846,971	33.0	25.05	2007, 2008, 2011, and 2012
GSA/Dept. of Justice	AAA	270,598	10.5	28.15	2007, 2008, 2012, and 2015
Science Applications International	A-	156,329	6.1	26.41	2008, 2010, and 2011
GSA/Social Security Administration	AAA	86,903	3.4	28.03	2007 and 2009
Total	—	1,360,801	53.0	—	—
GSA-General Services Administration.

The sponsor of the bankruptcy-remote SPE borrower is Vornado Realty Trust ('BBB+'). Vornado, the fourth-largest REIT in the U.S. with a market capitalization of almost $18 billion, owns all or portions of 111 office properties (30.7 million sq. ft.) located in the New York City metropolitan area, Washington, D.C., and northern Virginia. With 17.8 million sq. ft. of office space in the Washington, D.C. metro market, Vornado is the largest owner of office properties in that market. In addition, the company owns 111 retail properties in nine states and Puerto Rico (16.3 million sq. ft.) and 9.5 million sq. ft. of showroom space, including the 3.4-million sq.-ft. Merchandise Mart in Chicago. Vornado also has a 47.6% interest in Americold Realty Trust (the largest owner and operator of cold storage warehouses in North America), a 33% interest in Alexander's department store, a 33% interest in Toys "R" Us, a 15.8% interest in Newkirk Realty Trust through operating partnership units, and an 11.3% interest in GMH Communities L.P. The subject is managed by Vornado, through its Charles E. Smith Commercial Realty division. Charles E. Smith manages 15.9 million sq. ft. of Vornado owned office properties and an additional 8 million sq. ft. of office space on behalf of third parties. The loan is structured with a hard lockbox for cash management.

The following points summarize Standard & Poor's underwriting assumptions for this loan:

• GPR was based on the Jan. 29, 2007 rent roll with vacant space grossed up at the weighted average in place rents;
• A weighted average vacancy of 5.0% was assumed for the entire pool, which is greater than the actual in-place vacancy and consistent with the market;
• Expense reimbursements were based on the tenants' contractual obligations and the 2007 budget;
• Operating expenses were based on the 2007 budget, which was consistent with historical performance;
• A management fee of $1,099,373 was assumed;
• TI expenses were estimated at $10.00 per sq. ft. for new leases and $5.00 per sq. ft. for renewal leases;
• LCs were estimated at 4.0% for new leases and 2.0% for renewals leases;
• TI/LC assumptions were based on the in-place weighted average lease term of 8.8 years;
• Standard & Poor's assumed a renewal probability of 70% for the GSA tenants and 65% for all other tenants, resulting in an overall renewal probability of 67.6%;
• Replacement reserves were underwritten at $0.25 per sq. ft. of collateral NRA;
• Based on these assumptions, Standard & Poor's NCF variance was 5.4%;
• Standard & Poor's capitalized the NCF using an 8.75% capitalization rate, resulting in a value of $530.8 million ($207 per sq. ft); and
• The quality scores for the properties th