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Fitch Downgrades 14 Below Investment Grade Classes from JPMCC 2006-LDP9

CHICAGO - (BUSINESS WIRE) - Fitch Ratings downgrades 14 classes of JP Morgan Chase Commercial Mortgage Securities Corp., series 2006-LDP9 commercial mortgage pass-through certificates. A detailed listing of rating actions follows at the end of this release.

The downgrades reflect an increase in Fitch modeled losses across the pool, which includes assumed losses on loans in special servicing and on performing loans with declines in performance indicative of a higher probability of default. Fitch modeled losses of 14.7% (15.6% cumulative transaction losses which includes losses realized to date). Fitch expects classes F through P to be fully depleted by losses on specially serviced loans and classes E and E-S to be impacted.

As of the December 2011 distribution date, the pool's aggregate principal balance has been reduced by 7.2% to $4.53 billion from $4.88 billion at issuance. There are no defeased loans. There are cumulative interest shortfalls in the amount of $11.9 million affecting classes E through NR.

The largest contributor to losses is the Belnord loan (7.9%) secured by a 215 unit residential rental property located in the Upper West Side neighborhood of New York City. In addition to the residential rentals, the property also includes 60,514 square feet (sf) of retail space. The loan is sponsored by Gary Barnett. The property consists of both rent controlled/stabilized and market rent units. At issuance, the borrower estimated that units would be converted from rent controlled/stabilized to market rents benefiting from the upside in revenue. The New York State Supreme Court recently ruled that if a property received a J-51 Tax Abatement from the city, such as the subject, they could not increase the rents on rent controlled/stabilized units to market rents. This decision will have a major impact on the borrower's ability to execute its business plan.

The loan transferred to the special servicer in June 2011 for imminent default. Workout discussions are ongoing. The year-end (YE) 2010 debt service coverage ratio (DSCR) and occupancy were 95% and 0.56 times (x) compared to issuance of 98% and 0.47x, respectively. The loan was structured with a $50 million reserve for debt service shortfall, of which $12.2 million remains outstanding. Fitch expects that, at current operating levels, the debt service reserve is sufficient to cover shortfalls for approximately one more year.

The second largest contributor to losses is the Americold Portfolio, which is secured by four cold storage warehouse/distribution facilities totaling 3,328,621 sf (51,654,912 cubic feet) located across four states. The properties are located in Carthage, MO (66% of portfolio NRA); Fort Worth, TX (14.3% of portfolio NRA); West Point, MS (10.3% of portfolio NRA) and Garden City, KS (9.5% of portfolio NRA). The loan is sponsored by Vornado Realty Trust, Crescent Real Estate Equities and the Yucaipa Companies. The servicer reported DSCR for YE 2010 and issuance was 0.67x and 1.85x, respectively. The drop in DSCR is attributed to the loss of a major tenant, Sarah Lee, who has ceased renting space in the Fort Worth property. This Fort Worth property has since been closed in an effort to reduce operating expenses.

The third largest contributor to losses is the Bank of America Plaza loan which is secured by a 1,253,499 sf class A office property in Atlanta, GA. The loan transferred to the special servicer in February 2011 due to imminent default. Workout discussions continue, however no agreement has yet been reached. The loan is 60 days delinquent.

The property was 82% occupied as of YE 2009 (the most recent figure available), compared with approximately 100% at issuance. Ernst & Young (17% of NRA) vacated upon expiration of its lease in April 2007. The largest tenant, Bank of America, has indicated that it will significantly downsize its space to approximately 13% of NRA from 30% beginning in October 2011. Additionally, the lease rate on the space will be approximately half of what Bank of America was previously paying.

Fitch has downgraded the following classes as indicated:

--$318.5 million class A-J to 'CCCsf' from 'Bsf'; RE 60%;

--$106.3 million class A-JS to 'CCCsf' from 'Bsf'; RE 60%;

--$22.8 million class C to 'CCsf' from 'CCCsf'; RE to 0% from 100%;

--$7.6 million class C-S to 'CCsf' from 'CCCsf'; RE to 0% from 100%;

--$50 million class D to 'CCsf' from 'CCCsf'; RE to 0% from 100%;

--$16.7 million class D-S to 'CCsf' from 'CCCsf'; RE to 0% from 100%;

--$40.9 million class E to 'Csf' from 'CCCsf'; RE to 0% from 100%;

--$13.7 million class E-S to 'Csf' from 'CCCsf'; RE to 0% from 100%;

--$40.9 million class F to 'Csf' from 'CCCsf'; RE to 0% from 100%;

--$13.7 million class F-S to 'Csf' from 'CCCsf'; RE to 0% from 100%;

--$36.4 million class G to 'Csf' from 'CCsf'; RE to 0% from 100%;

--$12.1 million class G-S to 'Csf' from 'CCsf'; RE to 0% from 100%;

--$45.5 million class H to 'Csf' from 'CCsf'; RE to 0% from 100%;

--$15.2 million class H-S to 'Csf' from 'CCsf'; RE to 0% from 60%;

Additionally, Fitch has affirmed the following classes and revised Outlooks and Recovery Estimates as indicated:

--$114.7 million class A-2 at 'AAAsf'; Outlook Stable;

--$364.7 million class A-2S at 'AAAsf'; Outlook Stable;

--$34 million class A-2SFX at 'AAAsf'; Outlook Stable.

--$160.4 million class A-2SFL at 'AAAsf'; Outlook Stable;

--$1,652 million class A-3 at 'AAAsf'; Outlook Stable;

--$145.3 million class A-3SFL at 'AAAsf'; Outlook Stable;

--$671.9 million class A-1A at 'AAAsf'; Outlook Stable;

--$364 million class A-M at 'Asf'; Outlook to Negative from Stable;

--$121.4 million class A-MS at 'Asf'; Outlook to Negative from Stable;

--$72.8 million class B at 'CCCsf'; RE to 0% from 100%;

--$24.3 million class B-S at 'CCCsf'; RE to 0% from 100%;

--$18.2 million class J at 'Csf'; RE 0%.

Class NR is not rated by Fitch. Classes K through P have realized losses and remain at 'Dsf'RE 0%. Classes A-1 and A-1S have paid in full. Fitch withdrew the ratings of the interest only class X. (For additional information, see 'Fitch Revises Practice for Rating IO & Pre-Payment Related Structured Finance Securities', dated June 23, 2010.)

Additional information on Fitch's amended criteria for analyzing U.S. fixed rate CMBS is available in the Nov. 16, 2011 report, 'Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions,' which is available at 'www.fitchratings.com' under the following headers:

Structured Finance >> CMBS >> Criteria Reports

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (Aug. 13, 2011);

--'Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions' (Nov. 16, 2011).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=646569

Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=662869

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 Ratings
Brian Bertsch, +1-212-908-0549
Media Relations, New York
brian.bertsch@fitchratings.com
or
Primary Analyst:
R. Brook Sutherland, +1-312-606-2346
Director
Fitch, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Committee Chairperson:
Adam Fox, +1-212-908-0869
Senior Director