News Column

Fitch Upgrades 1 Class of JPMCCM 2004-C3

April 30, 2014

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has upgraded one and affirmed 17 classes of JP Morgan Chase Commercial Mortgage Securities Corp. (JPMCC) commercial mortgage pass-through certificates series 2004-C3. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrade is due to additional defeasance and paydown since Fitch's last rating action. The affirmations reflect the pool's stable performance.

Fitch modeled losses of 3.3% of the remaining pool; expected losses on the original pool balance total 6.3%, including $67.2 million (4.4% of the original pool balance) in realized losses to date. Fitch has designated 17 loans (19.4%) as Fitch Loans of Concern. Presently, there are no specially serviced loans in the pool.

As of the April 2014 distribution date, the pool's aggregate principal balance has been reduced by 42.3% to $875.5 million from $1.52 billion at issuance. Per the servicer reporting, 18 loans (27.9% of the pool) are defeased. Interest shortfalls are currently affecting classes N through NR.

The largest contributor to expected losses is the Lakeshore Club Apartments loan (3.1%), which is secured by a multifamily property consisting of 613 units located in Tampa, FL. The property is 96% occupied as of January 2014 with an average rental rate of $635 per month. The loan was modified in November 2012 and the borrower continues to pay as agreed. The loan is interest only through the remaining term, which was extended to November 2015.

The next largest contributor to expected losses is the Crossroads Shopping Center loan (6.6% of the pool), which is secured by a 310,753 square foot (sf) anchored retail center located in White Plains, NY. The largest tenants are KMART (32%), lease expiration January 2017; HomeGoods (8%), expiration November 2018; and Modell's (8%), which recently extended their lease thru 2024. The property's performance significantly declined in 2011 as a result of A&P Supermarket (12%) vacating its space. As of December 2013, the property is 82.4% occupied; however two new leases were signed with tenants DSW Shoe Warehouse and PetSmart for the vacant A&P space in the 3rd quarter 2013. Once the tenants are in place, occupancy should increase to 96%. There is minimal upcoming rollover over the next two years.

The third largest contributor to expected losses is the Cambridge Court Phase I & II loan (2.2%), which is secured by a 254,698 sf medical office property located in Auburn Hills, MI. As of December 2012 the property was 55% occupied. The tenant Genesy's Regional Medical (5%) vacated the property at lease expiration in March 2013; however, a related entity leased the space as of April 2013 at a rental rate of $17.75 sf through April 2016.

RATING SENSITIVITY

Rating Outlooks on classes A-1, A-4, A-5 and C thru D remain Stable due to increasing credit enhancement and continued paydown. The Positive outlook on class B reflects the future expected paydown from loan maturities in 2014. In the current review, approximately 49% of the pool was modeled to pay off at the respective loan maturities, as these loans pass both refinance tests.

Fitch upgrades the following classes as indicated:

--$87.3 million class A-J to 'AAAsf' from 'AAsf'; Outlook Stable.

Fitch affirms the following classes, assigns and revises Rating Outlooks and REs as indicated:

--$43.6 million class B at 'Asf'; Outlook to Positive from Stable;

--$15.2 million class E at 'BBsf'; Outlook to Stable from Negative;

--$15.2 million class F at 'Bsf'; Outlook to Stable from Negative;

--$19 million class G at 'CCCsf', RE 100%;

--$15.2 million class H at 'CCCsf', RE 25%.

Fitch affirms the following classes as indicated:

--$112.8 million class A-1A at 'AAAsf'; Outlook Stable;

--$107.6 million class A-4 at 'AAAsf'; Outlook Stable;

--$421.4 million class A-5 at 'AAAsf'; Outlook Stable;

--$13.3 million class C at 'BBB-sf'; Outlook Stable;

--$13.3 million class D at 'BBsf'; Outlook Stable;

--$13.7 million 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 P at 'Dsf', RE 0%;

--$0 class Q at 'Dsf', RE 0%.

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

Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 18, 2012 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. 18, 2012).

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

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.



Fitch Ratings

Primary Analyst:

Lisa Cook, +1-212-908-0665

Director

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

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

Source: Fitch Ratings


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