NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has downgraded four classes of GMAC Commercial Mortgage Securities, Inc. Series 2006-C1, commercial mortgage pass-through certificates, due to further deterioration of performance, most of which is associated with expected losses on the specially serviced loans. A detailed list of rating actions follows at the end of this release.

The downgrades reflect further certainty on expected losses on loans in special servicing. Fitch modeled losses of 9.75% of the remaining pool. Fitch has designated 24 loans (36.6%) as Fitch Loans of Concern, which includes nine specially serviced loans (20.4%). Fitch expects classes H thru M may be fully depleted from losses associated with the specially serviced assets and class G will also be affected.

As of the October 2011 distribution date, the pool's aggregate principal balance has been paid down by approximately 21.2% to $1.37 billion from $1.73 billion at issuance. There is currently $2.7 million in interest shortfalls affecting classes G through Q.

The largest specially serviced loan and contributor to loss

(5.2%) is secured by a 30-story, 956,201 square foot (sf) office building located in Jacksonville, FL. The loan transferred to special servicing in September 2011 due to imminent monetary default when the largest tenant at the property downsized its space by 100,000sf. The property was 41% occupied as of September 2011 with an average in-place rent of $8.46 per square foot (psf). Per CoStar as of the 3rd quarter (3Q) 2011, the Jacksonville office market had a vacancy rate of 14.1% with average rental rates of $17 psf. The special servicer and borrower are in discussions to determine an appropriate resolution strategy.

The second largest specially serviced loan and contributor to loss (3.8% of pool balance) is secured by a three-building office complex comprising 486,963 square feet, located in Springdale, OH. The loan transferred to special servicing in May 2010 due to imminent monetary default. The decline in performance is due to the loss of the largest tenant which occupied 63% of the space vacating upon lease expirations in December 2009 and March 2010. The property is currently 37% occupied. The special servicer continues to pursue leasing opportunities.

The third largest specially serviced loan (4.6%) and contributor to loss was originally secured by a portfolio of 35 single-tenanted retail properties located in California, Nevada, Arizona, and Texas, of which 24 remain. The collateral was previously 100% leased by Mervyn's under 20-year leases; however, the tenant subsequently filed for Chapter 11 bankruptcy relief, and rejected and vacated each of the stores. To date, six of the stores have been fully leased, four partially leased, 14 are vacant, 11 have been sold, and two store sales are pending. The portfolio is currently 34% leased. All reserves have been depleted and proceeds from the sale of properties and previous funds held in reserve have been used to reduce the outstanding principal balance.

The loan is split into three pari passu notes, including the fixed-rate A-2 note in this transaction, the fixed-rate A-1 note ($71 million) securitized in the GE 2005-C4 transaction and the floating-rate A-3 note ($11.4 million) securitized in the COMM 2005-FL11 transaction. Fitch also rates the COMM 2005-FL11 transaction.

Fitch downgrades and maintains Recovery Ratings as follows:

--$21.2 million class E to 'CCsf/RR2' from 'CCCsf/RR2';

--$17 million class F to 'Csf/RR6' from 'CCsf/RR6';

--$19.1 million class G to 'Csf/RR6' from 'CCsf/RR6';

--$19.1 million class H to 'Csf/RR6' from 'CCsf/RR6'.

Fitch also affirms the following classes as follows:

--$11.4 million class A-2 at 'AAAsf'; Outlook Stable;

--$98 million class A-3 at 'AAAsf'; Outlook Stable;

--$576.1 million class A-4 at 'AAAsf'; Outlook Stable;

--$188.4 million class A-1A at 'AAAsf'; Outlook Stable;

--$169.7 million class A-M at 'AAAsf'; Outlook Stable;

--$114.6 million class A-J at 'BBB-sf; Outlook Negative;

--$36.1 million class B at 'Bsf'; Outlook Negative;

--$19.1 million class C at 'CCCsf/RR1';

--$12.7 million class D at 'CCCsf/RR1';

--$23.3 million class J at 'Csf/RR6';

--$6.4 million class K at 'Csf/RR6';

--$5.3 million class L at 'Dsf/RR6';

--$5.1 million class FNB-1 at 'Bsf; Outlook Negative;

--$5.6 million class FNB-2 at 'Bsf'; Outlook Negative;

--$2.1 million class FNB-3 at 'CCCsf/RR1';

--$4.5 million class FNB-4 at 'CCCsf/RR1';

--$2.4 million class FNB-5 at 'CCCsf/RR1';

--$13.3 million class FNB-6 at CCCsf/RR1.

Classes M, N, O, P, remain at 'Dsf/RR6' due to principal losses incurred and have been reduced to zero. Class Q is not rated by Fitch. Classes A-1 and A-1D have paid in full.

Fitch had previously withdrawn the ratings on the interest-only classes XP and XC.

Additional information on Fitch's criteria for analyzing U.S. CMBS is available in the Nov. 17, 2010 report, 'Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions', which is available at 'www.fitchratings.com' under the following headers:

Structured Finance then CMBS then 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. 4, 2011);

--'Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions' (Nov. 17, 2010).

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=574208

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.

CONTACT:

Fitch Ratings
Primary Analyst
Lisa Cook, +1-212-908-0665
Director
Fitch, Inc.
One State Street Plaza
New York, NY 10004
or
Committee Chairperson
Mary MacNeill, +1-212-908-0785
Managing Director
or
Media Relations:
Brian Bertsch, +1-212-908-0549
Email: brian.bertsch@fitchratings.com

KEYWORDS:   United States  North America  New York

INDUSTRY KEYWORDS:   Professional Services  Banking

MEDIA: