- --------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event
reported) February 23, 1998
-----------------
J.P. Morgan Commercial Mortgage Finance Corp.
------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 333-31095 13-3789046
- ---------------------------- ------------ ------------------
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
60 Wall Street
New York, New York 10260
-------------------------------
(Address of Principal Executive
Offices and Zip Code)
Registrant's telephone number, including area code (212) 648-9344
--------------
- --------------------------------------------------------------------------
Item 5. Other Events
- ---- ------------
Filing of Collateral Term Sheets.
- --------------------------------
In connection with the proposed offering of J.P. Morgan Commercial
Mortgage Finance Corp. (the "Company") Mortgage Pass-Through Certificates,
Series 1998-C6, J.P. Morgan Securities Inc. (the "Underwriter") has prepared
certain materials (the "Collateral Term Sheets") for distribution to its
potential investors. Although the Company provided the Underwriter with
certain information regarding the characteristics of the mortgage loans in
the related portfolio, it did not participate in the preparation of the
Collateral Term Sheets. The Collateral Term Sheets are attached hereto as
Exhibit 99.
Item 7. Financial Statements, Pro Forma Financial
- ---- -----------------------------------------
Information and Exhibits.
------------------------
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
The exhibit number corresponds with Item 601(b) of Regulation S-K.
Exhibit No. Description
----------- -----------
99 Collateral Term Sheets
dated February 23, 1998
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
J.P. MORGAN COMMERCIAL MORTGAGE
FINANCE CORP.
By: /s/ Larry Blume
---------------------
Name: Larry Blume
Title: Vice President
Dated: February 24, 1998
Exhibit Index
-------------
Exhibit Page
- ------- ----
99. Collateral Term Sheets
dated February 23, 1998 6
EXHIBIT 99
COLLATERAL TERM SHEETS
for
J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP.
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1998-C6
J.P. Morgan Commercial Mortgage Finance Corp.
Mortgage Pass-Through Certificates, Series 1998-C6
$722,090,000
<TABLE>
<CAPTION>
CREDIT
SUPPORT
<S> <C> <C>
Class A1
29.0% $100,000,000
AAA/AAA
Class A2
29.0% $222,000,000
AAA/AAA
Class A3
29.0% $247,650,000
AAA/AAA
Class B Class X
23.0% $48,139,000 $802,326,512
AA/AA (Notional Amount)
AAA/AAA
Class C
18.0% $40,116,000
A/A
Class D
12.0% $48,139,000
BBB/BBB
Class E
10.0% $16,046,000
BBB-/BBB-
Subordinate Certificates
$80,236,512
(Not offered)
</TABLE>
J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP.
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1998-C6
$722,090,000
TRANSACTION OVERVIEW
<TABLE>
<CAPTION>
Rating Current Credit Loan Coupon Principal
( S&P/ Size % of Enhance to Descrip at Average Window $ Price
Class Fitch ) ($)/1/ Total -ment % Value/2/ -tion Issuance/1/ Life(yrs.)/3/ (mos.) Price Talk
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
SECURITIES OFFERED:
SENIOR CERTIFICATES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
A1 AAA/AAA 100,000,000 12.46 29.00 44.65 Fixed - 3.91 1-78 100-16 -
A2 AAA/AAA 222,000,000 27.67 29.00 44.65 Fixed - 7.52 78-112 100-24 -
A3 AAA/AAA 247,650,000 30.87 29.00 44.65 Fixed - 9.70 112-118 101-00 -
</TABLE>
MEZZANINE CERTIFICATES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
B AA/AA 48,139,000 6.00 23.00 48.43 Fixed - 10.20 118-130 101-00 -
C A/A 40,116,000 5.00 18.00 51.57 Fixed - 11.35 130-140 101-00 -
D BBB/BBB 48,139,000 6.00 12.00 55.35 Fixed - 11.78 140-142 100-00 -
E BBB-/BBB- 16,046,000 2.00 10.00 56.60 Fixed - 11.86 142-142 97-20 -
</TABLE>
INTEREST ONLY CERTIFICATES (IO)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
X AAA/AAA 802,326,512/4/ - - - WAC - - - - -
</TABLE>
SECURITIES NOT OFFERED:
SUBORDINATE CERTIFICATES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
F BB/BB 40,116,000 - 5.00 - Fixed 6.00% - - - -
G B/B 20,058,000 - 2.50 - Fixed 6.00% - - - -
H B-/B- 6,017,000 - 1.75 - Fixed 6.00% - - - -
NR NR/NR 14,045,512 - 0.00 - Fixed 6.00% - - - -
Total - 802,326,512 - - - - - - - - -
</TABLE>
/1/ Approximate, subject to change
/2/ The sum of the principal balance of each certificate and the
certificates senior to it, divided by the aggregate appraised value of
the collateral
/3/ Assumes prepayments of 0% CPR
/4/ Notional Amount
CONTACTS:
Brian Baker (trading) (212) 648-1413
Andy Taylor (trading) (212) 648-1413
Patrick Corcoran (research) (212) 648-1431
Michael Glover (product manager) (212) 648-0258
Bret Costain (syndicate) (212) 648-0660
DEAL SUMMARY
PRICING SPEED: 0% CPR
DISTRIBUTION DATES: Pays monthly on the 15th day of every month,
beginning in April 1998
DEPOSITOR: J.P. Morgan Commercial Mortgage Finance Corp., an
indirect wholly-owned limited purpose finance
subsidiary of J.P. Morgan & Co. Incorporated and an
affiliate of J.P. Morgan Securities Inc. ("JPMSI"),
the Underwriter.
SELLER: The mortgage loans were originated by Morgan Guaranty
Trust Company of New York (96.79%), Banc One Commercial
Loan Origination Corporation (2.28%), Norwest Bank
Minnesota (.76%), John Hancock Real Estate Finance Inc.
(.16%)
MASTER SERVICER: Dover House Capital, LLC
SPECIAL SERVICER: CRIIMI MAE Services Limited Partnership
TRUSTEE: State Street Bank and Trust Company
LEGAL STATUS: All offered certificates are public
CUT-OFF DATE: March 1, 1998
SETTLEMENT DATE: On or about March 10, 1998
DELIVERY: DTC and Euroclear
CLEANUP CALL: 1%
TRUSTEE WEBSITE: corporatetrust.statestreet.com
DEAL INFORMATION/
ANALYTICS: Bloomberg, Charter Research, and The Trepp Group
ERISA ELIGIBILITY: Class A1, Class A2, Class A3, and Class X are generally
exempt from the application of certain of the prohibited
transaction provisions of Section 406 of ERISA, provided
certain conditions are satisfied.
SMMEA ELIGIBILITY: Class A1, Class A2, Class A3, Class B, and Class X
Certificates will be "mortgage related securities" within
the meaning of the Secondary Mortgage Market Enhancement
Act of 1984 ("SMMEA") so long as they are rated in one of
the two highest rating categories by at least one
nationally recognized statistical rating organization.
PRINCIPAL BALANCE: $802,326,512
NUMBER OF LOANS: 93
W.A. MORTGAGE RATE: 7.79%
W.A. REMAINING TERM
TO MATURITY: 126 months
W.A. CUT-OFF DATE
LTV RATIO: 65.95%
W.A. UNDERWRITTEN DSCR: 1.54x
AVG. PRINCIPAL BALANCE
PER LOAN: $8,627,167
AVG. PRINCIPAL BALANCE
PER PROPERTY: $6,857,492
STRUCTURAL SUMMARY
PASS-THROUGH RATES: The Pass-Through Rates on Class A1, Class A2, Class A3,
Class B, Class C, Class D, and Class E are fixed. The
Pass-Through Rate on the Class X Certificates will be
equal to the weighted average of the Remittance Rates in
effect from time to time on the Mortgage Loans minus the
weighted average (by Class Balance) of the Pass-Through
Rates on all other classes of Certificates. The Pass-
Through Rate on the Class X Certificates for the initial
Distribution Date will be ___% per annum.
FLOW OF FUNDS: The Adjusted Available Distribution Amount (described in
the prospectus) for any Distribution Date (the 15th day
of each month or next succeeding business day) will be
applied (a) first, to distributions of interest on the
classes of Certificates outstanding with the highest
priority for interest payment (as described below), (b)
second, to distributions of the Principal Distribution
Amount to the classes of Certificates then entitled to
distributions of principal described below, and (c)
third, to distributions of interest on each Class of
Certificates other than the classes then entitled to
distributions pursuant to clause (a) above, in the order
of priority described below.
PRIORITY OF INTEREST: The priority for interest payments is first to the
Class A1, Class A2, Class A3, and Class X
Certificates, pro rata; second to the Class B
Certificates; third to the Class C Certificates;
fourth to the Class D Certificates; fifth to the
Class E Certificates; and then sequentially to the
remaining classes of Certificates, as described in
the prospectus. Distributions of interest are based
on each Class' respective Interest Accrual Amounts,
which is the interest accrued on the Class Balance
(or the Notional Amount, in the case of the Class X)
at the then applicable Pass-Through Rate, less any
interest shortfalls not related to Mortgagor
delinquency or default.
PRINCIPAL DISTRIBUTION
AMOUNT: The Principal Distribution Amount for such Distribution
Date will be applied to distributions of principal of the
Class A1, Class A2, Class A3, Class B, Class C, Class D,
and Class E Certificates, in that order, and then
sequentially to distributions of principal of remaining
classes of Certificates until their respective Class
Balances have been reduced to zero. The Principal
Distribution Amount is equal to the aggregate of (i) all
scheduled payments of principal (other than Balloon
Payments) due on the Mortgage Loans on the related Due
Date whether or not received and all scheduled Balloon
Payments received, (ii) with respect to any Balloon Loan
on and after the Maturity Date thereof, the principal
payment that would need to be received in the related
month in order to amortize fully such Balloon Loan with
level monthly payments by the end of the amortization
term, (iii) to the extent not previously advanced, any
unscheduled principal recoveries received during the
related Remittance Period, and (iv) any other portion of
the Adjusted Available Distribution Amount remaining
undistributed after payment of any interest payable on
the Certificates for the related or any prior
Distribution Date. The Class X Certificates do not have
a Class Balance and are therefore not entitled to any
principal distributions.
PREPAYMENT PREMIUMS: To the extent not necessary to reimburse the Master
Servicer for certain payments, each class of
certificates (other than the Class X Certificates)
will receive on each Distribution Date the product
of (a) any Net Prepayment Premium paid with respect
to the Mortgage Loans if such Net Prepayment Premium
is calculated by reference to a U.S. Treasury rate,
(b) the related Class Prepayment Fraction and (c)
the related Allocation Fraction. On each
Distribution Date, the Net Prepayment Premium not
payable to the Master Servicer or the holders of the
Offered Certificates (other than the Class X
Certificates) will be paid the holders of the Class
X Certificates. On each Distribution Date, the Net
Prepayment Premium not payable to the Master
Servicer or the holders of the Offered Certificates
will be paid to the holders of the non-Offered
Certificates. The Class Prepayment Fraction for any
class of Offered Certificates and any Distribution
Date will equal a fraction the numerator of which is
the amount of principal paid to such class in
reduction of the Class Balance thereof on such
Distribution Date and the denominator of which is
the amount of principal paid to all classes of
Certificates in reduction of their respective Class
Balances on such Distribution Date. The Allocation
Fraction for any class of Offered Certificate and
any Distribution Date will equal a fraction (not
greater than one and not less than zero) (x) the
numerator of which is the excess of (a) the Pass-
Through Rate of such class of Offered Certificates
over (b) the discount rate used to calculate the
related Net Prepayment Premium and (y) the
denominator of which is the excess of (a) the
Mortgage Rate on the related Mortgage Loan over (b)
the discount rate referenced in clause (x) above.
To the extent not necessary to reimburse the Master
Servicer, as described above, any Net Prepayment
Premium paid with respect to Mortgage Loan which is
not calculated by reference to U.S. Treasury rate
(i.e., fixed penalties) will be distributed solely
to the Class X Certificates.
P&I ADVANCES: The Master Servicer and the Special Servicer (each, a
"Servicer") are required to make advances for delinquent
Monthly Payments on the Mortgage Loans, subject to the
limitations described in the prospectus. In addition, the
Servicer will be required to advance certain property
related expenses, provided such advances are contemplated
in the Asset Strategy Report (defined on the next page)
for the related Mortgage Loan or such advance is for one
of several purposes specified in the Pooling and
Servicing Agreement as "Property Protection Expenses".
The Servicer will be obligated to make any such advance
only to the extent that it determines in its reasonable
good faith judgment that such advance would be
recoverable out of net proceeds on the related Mortgage
Loan.
SUBORDINATION/REALIZED
LOSSES: Credit enhancement for each of the Classes is shown on
the table on the second page. Realized Losses from any
Mortgage Loan will be allocated in reverse sequential
order starting with Class NR and pro rata with respect to
Class A1, Class A2 and Class A3.
SPECIAL SERVICER
FLEXIBILITY: When a loan is 60 or more days past due, or in certain
other servicing transfer events described in the
prospectus, the servicing responsibility on a particular
Mortgage Loan will be transferred to the Special
Servicer. The Special Servicer has the flexibility to
modify loans as it deems in its best judgment necessary
or advisable, subject to the procedures described in the
prospectus.
COLLATERAL VALUE
ADJUSTMENT: Under certain circumstances described in the
prospectus, an appraisal of the Mortgaged Property
will be ordered by the related Special Servicer from
an independent MAI appraiser. As a result of such
appraisal, a Collateral Value Adjustment may result,
which will be allocated, for purposes of determining
distributions of interest to the Certificates, other
than the Class X Certificates, in the manner and
priority described above with respect to Realized
Losses.
ASSET STRATEGY REPORT: The Special Servicer will prepare a report (an
"Asset Strategy Report") for each Mortgage Loan
which becomes a Specially Serviced Mortgage Loan not
later than 30 days after the Servicing Transfer Date
for such Mortgage Loan. The holders of the fewest
number of the most junior classes of Certificates
representing at least 1.5% of the aggregate amount
of Certificates then outstanding, will designate one
Certificateholder (the "Directing
Certificateholder") which may object to any Asset
Strategy Report within 10 business days of receipt.
If the Directing Certificateholder does not
disapprove an Asset Strategy Report within 10
business days, the Special Servicer shall implement
the recommended action as outlined in such Asset
Strategy Report. If the Directing Certificateholder
disapproves, the Special Servicer shall either (i)
revise the plan until the Directing Certificate does
not disapprove, or (ii) determine that such
disapproval is not in the best interest of all
Certificateholders, in which case the Special
Servicer can implement the Report.
INVESTOR REPORTING: On each Distribution Date the Trustee shall furnish
each Certificateholder with a statement setting
forth certain information with respect to the
Mortgage Loans and the Certificates. The Report to
Certificateholders will report information as
follows: principal and interest payments,
outstanding pool and class balances, prepayments and
delinquencies. Current information on the
collateral will also be provided, including the
property type and geographic distribution, mortgage
rate, remaining term, current balance, LTV, DSCR,
occupancy rate, average rents, and the status of
prepayment penalties and/or lockout provisions.
This information will be based in part on operating
statements that borrowers are required to provide on
a periodic basis, either monthly, quarterly, or
annually. Finally, the Report will contain
information on the dispositions of any properties
that were foreclosed. Reports are available on the
Trustee's website: corporatetrust.statestreet.com
REPRESENTATIONS AND
WARRANTIES: MGT, as seller of the Mortgage Loans, will make
certain representations and warranties. MGT will be
obligated to repurchase any Mortgage Loan from the
trust if there exists an uncured material breach of
any such representation or warranty. These
representations and warranties are described more
fully in the prospectus.
AVERAGE LIFE SENSITIVITIES
<TABLE>
<CAPTION>
PREPAYMENT SPEEDS (CPR)/1/
0% 5% 10% 20%
AVERAGE PRINCIPAL AVERAGE PRINCIPAL AVERAGE PRINCIPAL AVERAGE PRINCIPAL
LIFE WINDOW LIFE WINDOW LIFE WINDOW LIFE WINDOW
CLASS (YRS) (MOS) (YRS) (MOS) (YRS) (MOS) (YRS) (MOS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
A1 3.91 1-78 3.86 1-77 3.82 1-76 3.74 1-73
A2 7.52 78-112 7.47 77-109 7.42 76-108 7.32 73-108
A3 9.70 112-118 9.69 109-118 9.67 108-118 9.64 108-118
B 10.20 118-130 10.13 118-130 10.07 118-130 9.96 118-126
C 11.35 130-140 11.26 130-140 11.18 130-139 11.01 126-139
D 11.78 140-142 11.76 140-142 11.74 139-142 11.71 139-142
E 11.86 142-142 11.86 142-142 11.86 142-142 11.86 142-142
X/2/ 5.67 5.62 5.58 5.51
</TABLE>
/1/ Assumes no prepayment during the lockout and yield maintenance periods
/2/ Implied Average Life
PREPAYMENT PROTECTION
Percentage of Mortgage Loans by Outstanding Principal Balance as of the Cut-
off Date that have Prepayment Lock-outs or Penalties (assuming no prepayments)
<TABLE>
<CAPTION>
CURRENT 3/99 3/00 3/01 3/02 3/03 3/04 3/05 3/06 3/07 3/08
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Lock-out/Defeasance 100.0 100.0 99.1 79.1 45.1 31.6 19.7 17.5 15.7 16.8 0.0
Yield Maintenance 1/(1)/ 0.0 0.0 0.9 10.2 44.1 54.6 59.2 77.6 78.0 66.7 64.5
Yield Maintenance 2/(2)/ 0.0 0.0 0.0 10.3 10.3 10.3 10.3 0.0 0.0 0.0 0.0
Total Lock-out and YM 100.0 100.0 100.0 99.6 99.6 96.5 89.2 95.1 93.7 83.6 64.5
7.00%-7.99% 0.0 0.0 0.0 0.0 0.0 0.0 1.0 0.0 0.0 0.0 0.0
6.00%-6.99% 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.1 0.0 0.0 0.0
5.00%-5.99% 0.0 0.0 0.0 0.0 0.0 3.1 0.0 0.0 1.0 0.0 0.0
4.00%-4.99% 0.0 0.0 0.0 0.0 0.0 0.0 3.1 0.0 0.0 1.0 0.0
3.00%-3.99% 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.8 0.0 0.0 14.2
2.00%-2.99% 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.9 0.0 0.0
1.00%-1.99% 0.0 0.0 0.0 0.4 0.4 0.4 0.0 0.0 0.0 2.5 0.0
No Penalty 0.0 0.0 0.0 0.0 0.0 0.0 6.7 0.0 1.4 12.9 21.2
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Agg. Mtg Balance 802.3 791.7 780.1 767.7 754.2 736.7 721.0 567.5 546.3 489.8 203.3
% of Cut-off Date Balance 100.0 98.7 97.2 95.7 94.0 91.8 89.9 70.7 68.1 61.1 25.3
/(1)/ T+0bp (1% Floor)
/(2)/ T+25bp (1% Floor)
</TABLE>
COLLATERAL SUMMARY
In the following tables, Principal Balance refers to Aggregate Cut-Off Date
Principal Balance.
CUT-OFF DATE NOTE RATES
<TABLE>
<CAPTION>
MORTGAGE INTEREST RATES NUMBER OF LOANS PRINCIPAL BALANCE ($) % OF PRINCIPAL
(%) BALANCE
<S> <C> <C> <C>
6.7501- 7.0000 2 84,528,710 10.5
7.0001- 7.2500 5 157,813,561 19.7
7.2501- 7.5000 8 51,637,183 6.4
7.5001- 7.7500 16 97,529,151 12.2
7.7501- 8.0000 17 112,171,901 14.0
8.0001- 8.2500 10 61,923,630 7.7
8.2501- 8.5000 13 132,172,770 16.5
8.5001- 8.7500 9 69,643,925 8.7
8.7501- 9.0000 10 27,920,021 3.5
9.2501- 9.5000 1 1,797,475 0.2
9.5001- 9.7500 1 1,791,283 0.2
9.7501-10.0000 1 3,396,900 0.4
TOTAL: 93 802,326,512 100
WEIGHTED AVERAGE: 7.79%
</TABLE>
CUT-OFF DATE PRINCIPAL BALANCES
<TABLE>
<CAPTION>
PRINCIPAL BALANCE ($) NUMBER OF LOANS PRINCIPAL BALANCE ($) % OF PRINCIPAL
BALANCE
<S> <C> <C> <C>
under 1,000,000 1 989,930 0.1
1,000,001- 3,000,000 37 74,739,418 9.3
3,000,001- 5,000,000 24 90,868,618 11.3
5,000,001- 7,500,000 7 40,327,736 5.0
7,500,001- 10,000,000 5 44,642,900 5.6
10,000,001- 15,000,000 5 61,643,030 7.7
15,000,001- 17,500,000 4 63,774,565 7.9
20,000,001- 25,000,000 1 24,877,953 3.1
25,000,001- 30,000,000 1 27,510,828 3.4
30,000,001- 35,000,000 2 64,115,618 8.0
35,000,001- 40,000,000 3/(1)/ 111,504,254 13.9
50,000,001- 60,000,000 1 50,615,148 6.3
60,000,001- 70,000,000 1 63,847,440 8.0
80,000,001- 90,000,000 1/(2)/ 82,869,076 10.3
TOTAL: 93 802,326,512 100
AVERAGE: 8,627,167
</TABLE>
/(1)/ Includes the Shannon Enterprises Loan which is secured by eleven
Mortgage Properties.
/(2)/ Includes the Kilroy Loan which is secured by thirteen Mortgage
Properties.
ORIGINAL TERM TO MATURITY/ARD
<TABLE>
<CAPTION>
ORIGINAL TERM TO NUMBER OF LOANS PRINCIPAL BALANCE ($) % OF PRINCIPAL
MATURITY (MONTHS) BALANCE
<S> <C> <C> <C>
60-83 1 3,192,844 0.4
84-119 7 153,891,115 19.2
120-179 67 522,854,702 65.2
180-299 18 122,387,850 15.3
TOTAL: 93 802,326,512 100
WEIGHTED AVERAGE: 132
</TABLE>
REMAINING TERM TO MATURITY/ARD
<TABLE>
<CAPTION>
REMAINING TERM NUMBER OF LOANS PRINCIPAL BALANCE ($) % OF PRINCIPAL
BALANCE
<S> <C> <C> <C>
43-60 1 3,192,844 0.4
73-84 7 153,891,115 19.2
85-108 10 54,099,144 6.7
109-120 52 332,111,047 41.4
121-132 1 27,510,828 3.4
133-144 4 109,133,684 13.6
169-180 9 59,923,530 7.5
217-240 9 62,464,320 7.8
TOTAL: 93 802,326,512 100
WEIGHTED AVERAGE: 126
</TABLE>
MATURITY DATE/ARD
<TABLE>
<CAPTION>
YEAR OF SCHEDULED MATURITY NUMBER OF LOANS PRINCIPAL BALANCE ($) % OF PRINCIPAL
BALANCE
<S> <C> <C> <C>
2003 - 2004 7 72,214,884 9.3
2005 - 2006 10 101,178,876 12.6
2007 - 2008 53 367,900,391 45.9
2009 - 2010 5 136,644,512 17.0
2012 - 2013 9 59,923,530 7.5
2017 - 2018 9 62,464,320 7.8
TOTAL: 93 802,326,512 100
</TABLE>
BALLOON VS. ARD VS. FULLY AMORTIZING LOANS
<TABLE>
<CAPTION>
TYPE NUMBER OF LOANS PRINCIPAL BALANCE ($) % OF PRINCIPAL
BALANCE
<S> <C> <C> <C>
Balloon 77/(1)/ 525,814,330 65.54
ARD 5 243,091,639 30.30
Fully Amortizing 11 33,420,542 4.17
TOTAL: 93 802,326,512 100
</TABLE>
/(1)/ Includes the Crystal Gateway Loan
CUT-OFF DATE LTV RATIOS
<TABLE>
<CAPTION>
CUT-OFF DATE LTV NUMBER OF LOANS PRINCIPAL BALANCE ($) % OF PRINCIPAL
RATIOS(%) BALANCE
<S> <C> <C> <C>
50.00 or less 3 94,274,619 11.8
50.01- 55.00 9 82,515,216 10.3
55.01- 60.00 3 8,132,609 1.0
60.01- 65.00 12 68,763,523 8.6
65.01- 70.00 25 216,815,290 27.0
70.01- 75.00 17 150,700,703 18.8
75.01- 80.00 20 165,418,526 20.6
80.01- 90.00 4 15,706,026 2.0
TOTAL: 93 802,326,512 100
WEIGHTED AVERAGE: 65.95%
</TABLE>
LTVS AT BALLOON/ARD DATE/1/
<TABLE>
<CAPTION>
LOAN TO VALUE (%) NUMBER OF LOANS PRINCIPAL BALANCE ($) % OF PRINCIPAL
BALANCE
<S> <C> <C> <C>
50.00 or less 21 257,200,558 33.5
50.01- 60.00 27 221,430,758 28.8
60.01- 65.00 15 137,521,268 17.9
65.01- 70.00 16 138,297,455 18.0
70.01- 75.00 3 14,455,931 1.9
TOTAL: 82 768,905,970 100
WEIGHTED AVERAGE: 52.18%
</TABLE>
(1) Based upon original appraisal
DEBT SERVICE COVERAGE RATIOS /(1)/
<TABLE>
<CAPTION>
DSCR NUMBER OF LOANS PRINCIPAL BALANCE ($) % OF PRINCIPAL
BALANCE
<S> <C> <C> <C>
less than 1.10/(2)/ 1 1,678,000 0.2
1.11-1.15 1 2,459,359 0.3
1.16-1.20 4 46,203,109 5.8
1.21-1.25 10 59,551,550 7.4
1.26-1.30 10 101,964,306 12.7
1.31-1.40 21 103,985,422 13.0
1.41-1.50 11 65,907,788 8.2
1.51-1.60 18 148,063,193 18.5
1.61-1.70 5 59,452,653 7.4
1.71-1.80 4 16,309,258 2.0
1.81-1.90 6 130,327,543 16.2
1.91-2.00 1 63,847,440 8.0
2.01-2.10 1 2,486,893 0.3
TOTAL: 93 802,326,512 100
WEIGHTED AVERAGE: 1.54X
</TABLE>
/(1)/ The Debt Service Coverage Ratio (DSCR) is defined as the ratio of
the property's underwritten net cash flow to the annual debt
service payment required by the Mortgage Loan.
/(2)/ Watertown Rite Aid credit tenant lease loan
PROPERTY TYPES
<TABLE>
<CAPTION>
PROPERTY TYPES NUMBER OF LOANS PRINCIPAL BALANCE ($) % OF PRINCIPAL WTD. AVG. DSCR
BALANCE /(1)/
<S> <C> <C> <C> <C>
Office/(2)/ 12 262,464,190 32.7 1.66
Multifamily 30 189,471,006 23.6 1.41
Hotel 11 119,593,785 14.9 1.77
Retail/(3)/ 22 145,429,991 18.1 1.33
Industrial 9 55,190,017 6.9 1.38
Nursing Home 3 14,530,370 1.8 1.58
Mobile Home Park 3 8,847,199 1.1 1.48
Self Storage 3 6,799,954 0.8 1.64
TOTAL: 93 802,326,512 100 1.54
</TABLE>
/(1)/ Refer to the Prospectus for a discussion of the calculation of this
DSCR
/(2)/ Includes the Kilroy Loan which is also secured by industrial
property
/(3)/ Includes anchored, unanchored, single tenant retail and
retail/office properties. See Annex A in the Prospectus for a
listing of the anchor tenants
PRINCIPAL BALANCE BY STATE
<TABLE>
<CAPTION>
GEOGRAPHIC DISTRIBUTION NUMBER OF LOANS PRINCIPAL BALANCE ($) % OF PRINCIPAL
BALANCE
<S> <C> <C> <C>
VA 5 171,829,599 21.4
CA/(1)/ 8 121,608,340 15.2
NJ 5 76,811,013 9.6
MI 5 56,068,429 7.0
NY 5 55,928,364 7.0
FL 10 49,728,938 6.2
NC 3 42,461,705 5.3
TX 13 37,384,080 4.7
HI 1 27,510,828 3.4
PA 1 24,877,953 3.1
IN 4 23,568,480 2.9
WI 2 19,227,907 2.4
OH 7 19,024,369 2.4
GA 5 18,181,935 2.3
IL 4 14,878,103 1.9
11 Others 15 43,236,468 5.4
TOTAL: 93 802,326,512 100
</TABLE>
/(1)/ Includes the Kilroy Loan which contains one property in Arizona.
PROPERTY AGE
<TABLE>
<CAPTION>
YEARS NUMBER OF LOANS PRINCIPAL BALANCE ($) % OF PRINCIPAL
BALANCE
<S> <C> <C> <C>
6 or less 11 61,403,194 7.7
7 - 11 19 167,830,568 20.9
12 - 16 12 167,470,414 20.9
17 - 21 10 38,910,342 4.8
22 - 26 13 55,716,389 6.9
27 - 31 8 66,061,938 8.2
32+ 20 244,933,667 30.5
TOTAL: 93 802,326,512 100
</TABLE>
OCCUPANCY RATES BY PROPERTY TYPE
<TABLE>
<CAPTION>
PROPERTY TYPE NUMBER OF LOANS PRINCIPAL BALANCE ($) % OF PRINCIPAL WEIGHTED AVERAGE
BALANCE OCCUPANCY RATE
(%)
<S> <C> <C> <C>
Retail 22 145,429,991 18.13 97.9
Multifamily/Mobile 33 198,318,205 24.72 95.5
Office 12 262,464,190 32.71 96.8
Other 15 76,520,341 9.54 97.2
Hotel 11 119,593,785 14.91 79.6
TOTAL: 93 802,326,512 100 94.32
</TABLE>
BORROWER/LOAN CONCENTRATION AND CROSS-COLLATERALIZED LOANS TO RELATED
BORROWERS
Additional terms and escrows for the Loans are as set forth on Annex A in the
prospectus.
THE KILROY REALTY LOAN
The largest Mortgage Loan (the "Kilroy Loan"), which represents
approximately 10.33% of the Initial Pool Balance, was originated by the
Seller on January 31, 1997 and has a principal balance as of the Cut-off Date
of $82,869,076. The Kilroy Loan is secured by a first deed of trust
encumbering thirteen properties, twelve of which are located in California
and one of which is located in Arizona (singularly, a "Kilroy Property" and
collectively, the "Kilroy Properties"). The Kilroy Loan was made to Kilroy
Realty Finance Partnership, L.P., a special purpose Delaware limited
partnership (the "Kilroy Borrower") which is controlled by Kilroy Realty
Corporation ("Kilroy"), a New York Stock Exchange listed real estate
investment trust which completed its initial public offering on January 31,
1997. As of June 30, 1997, Kilroy controlled approximately 2.5 million square
feet of commercial office space and 2.7 million square feet of industrial
space. Nine of the Kilroy Properties are improved by industrial buildings and
four of the Kilroy Properties are improved by office buildings.
The Kilroy Loan has a remaining amortization term of 287 months and
matures in December 2022. The Kilroy Loan may not be prepaid prior to March
1, 2001. However, the Kilroy Loan is subject to Defeasance, in whole or in
part, at any time on or after March 10, 2000. On or after March 1, 2001, the
Kilroy Loan may be prepaid, in whole but not in part, upon payment of a
Prepayment Premium based on a Yield Maintenance calculation. The Kilroy Loan
is an ARD Loan with an Anticipated Repayment Date of January 31, 2005; which
notwithstanding the foregoing, it may be prepaid, in whole or in part,
without payment of a Prepayment Premium at any time following the six months
preceding such Anticipated Repayment Date.
The Kilroy Properties consist of thirteen office and industrial
properties (comprised of sixteen buildings) described in the table below.
Five of the industrial properties are net leased to single tenants. In
aggregate, as of August 1997, the Kilroy Properties were 96.51% occupied. The
Kilroy Airport Center is comprised of two class A office buildings totaling
701,307 square feet. Approximately 50% of this property is leased to Hughes
Space & Communications whose parent company, GM Hughes Electronics Corp., is
rated as of the Cut-off Date, "A" by Standard & Poor's. Westlake Plaza Center
II and 185 S. Douglas Street are class B office properties totaling 141,158
square feet. The La Palma Business Center is comprised of one 42,790 square
feet office building and two industrial buildings. There are eight additional
industrial properties at various locations throughout Southern California and
one industrial building, 5515 N. 27th Avenue, in Phoenix, Arizona.
<TABLE>
<CAPTION>
Gross
Leaseable Type of Major Occupancy
Property Name Location Sq. Ft. Property Tenants (As of 8/97) Value
<S> <C> <C> <C> <C> <C> <C>
La Palma Anaheim, CA 186,880 Industrial Bond Technologies 75.6%/(A)/ $ 13,200,000
Business Center Novacare Orthotics
& Office
1000 E. Ball Road Anaheim, CA 100,000 Industrial Allen Bradley Company 100% $ 6,200,000
Electronics
1230 S. Lewis Street Anaheim, CA 57,730 Industrial RGB Systems 100% $ 3,200,000
2031 E. Mariposa El Segundo, CA 192,053 Industrial Mattel, Inc. 100% $ 16,000,000
Avenue
2260 E. El Segundo El Segundo, CA 113,820 Industrial Ace Medical Co. 100% $ 5,100,000
Boulevard
2265 E. El Segundo El Segundo, CA 6,570 Industrial MSAS Cargo Intl. 100% $ 4,700,000
Boulevard
3332/3340 E. La Anaheim, CA 153,320 Industrial Furon Company 100% $ 9,400,000
Palma Ave. Dovatron Manufacturing
5115 N. 27th Ave. Phoenix, AZ 130,877 Industrial Festival Markets 100% $ 4,500,000
12691 Pala Drive Garden Grove, CA 84,700 Industrial Rank Video Services 82.6% $ 5,400,000
12752 et al Garden Grove, CA 277,037 Industrial Cannon Equipment West 100% $ 10,200,000
Monarch Street
Kilroy Airport El Segundo, CA 701,307 Office Center Hughes Space & Comm 97.6% $108,000,000
Westlake Plaza Thousand Oaks, 81,158 Office LDDS Communications 100% $ 12,000,000
Centre II CA
185 S. Douglas St. El Segundo, CA 60,000 Office Northwest Airlines 100% $ 6,800,000
</TABLE>
(A)Does not include a fully executed lease to Rosemount Analytical for 45,581
square feet for which occupancy is scheduled for April 1998 and which will
raise occupancy to 97.5%.
The Kilroy Properties located at 185 South Douglas Street, 2031 E.
Mariposa Avenue, 3340 E. La Palma Avenue, 5115 N. 27th Avenue, and 12691 Pala
Drive are eligible for release from the Kilroy Loan after March 10, 2000 (the
"Kilroy Releasable Properties"). The release can be accomplished by
substituting one or more properties for one or more of the Kilroy Releasable
Properties or by partial Defeasance. Any partial Defeasance must defease 125%
of the allocated loan amount of the Kilroy Releasable Property to be
released. The allocated loan amounts of the Kilroy Releasable Properties are
set forth in the Kilroy Loan documents. No substitution or partial Defeasance
may be effected without obtaining written confirmation from each Rating
Agency that such release will not cause such Rating Agency to downgrade,
qualify or withdraw any of its then current ratings of any Certificates.
The Kilroy Properties are managed by Kilroy Realty, L.P., an affiliate
of the Kilroy Borrower. The Kilroy Loan documents provide that any future
management agreement entered into by the Kilroy Borrower and a third party
will be subject to, inter alia, written confirmation from each Rating Agency
that retention of such manager shall not result in a downgrade, withdrawal or
qualification of the then current ratings of any Certificates. The Kilroy
Loan documents further provide that the property manager can be terminated
with respect to the Kilroy Properties upon an event of default under the
Kilroy Loan.
Operating History
- -----------------
<TABLE>
<CAPTION>
Actual Originator's
1995 Actual 1996 Actual (2/97-7/97) Underwritten
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
EGI/(1)/ $29,201,341 $29,979,606 $14,861,753 $23,868,257
Expenses 6,095,407 5,274,561 2,407,988 6,107,660
----------- ----------- ----------- -----------
NOI $ 23,105,934 $24,705,045 $12,453,765 $17,760,597
UW Cash Flow $15,057,455
Occupancy 91.42% 97.87% 98.36% 88.40%
OER/(2)/ 20.87% 17.59% 16.20% 25.59%
DSCR based on NOI 2.88 3.08 3.11x 2.22
DSCR based on UW Cash Flow 1.88x
</TABLE>
/1/Effective Gross Income
/2/Operating Expense Ratio (Expenses/EGI)
All revenues of the Kilroy Properties are collected by the property
manager and deposited into a rent account from which funds are swept daily
into a cash collateral account controlled by the Master Servicer to fund a
tax and insurance reserve sub-account, an interest escrow sub-account, a
seismic repair reserve sub-account, a tenant improvement and leasing reserve
sub-account, a deferred maintenance reserve sub-account, a replacement
reserve sub-account, and a mortgage escrow sub-account, with all remaining
funds being released to the Kilroy Borrower. After the Anticipated Repayment
Date, all sums which would otherwise have been released to the Kilroy
Borrower shall instead be applied to pay down the Kilroy Loan.
THE CRYSTAL GATEWAY LOAN
The second largest Mortgage Loan (the "Crystal Gateway Loan"), which
represents approximately 7.96% of the Initial Pool Balance, was originated by
the Seller on December 15, 1997, and has a principal balance as of the
Cut-off Date of $63,847,440. The Crystal Gateway Loan is secured by a first
deed of trust (the "Crystal Gateway Mortgage") encumbering a hotel (the
"Crystal Gateway Marriott") located in Arlington, Virginia.
The Crystal Gateway Loan was made to Eads Associates Limited
Partnership, a special purpose Virginia limited partnership (the "Crystal
Gateway Borrower"). The Crystal Gateway Borrower is sponsored by the Charles
E. Smith organization (the "Charles E. Smith Organization"), which also
sponsored the Crystal Plaza Borrower and the Skyline Borrower. The Charles E.
Smith Organization is one of the largest real estate development,
construction, leasing and management organizations in the Washington, D.C.
metropolitan area. The firm's portfolio of owned and managed properties
includes over 20,000,000 square feet of commercial space, over 24,000
residential units and one million square feet of retail space.
The Crystal Gateway Loan has a remaining amortization term of 298 months
and matures in December 2017. The Crystal Gateway Loan may not be prepaid
prior to January 1, 2008. However, the Crystal Gateway Loan is subject to
Defeasance, in whole or in part, at any time between March 11, 2000 and
December 31, 2007, inclusive. On or after January 1, 2008, the Crystal
Gateway Loan may be prepaid, in whole but not in part, without payment of a
Prepayment Premium. The Mortgage Interest Rate for the Crystal Gateway Loan
will step up from 7.24% per annum to 7.39% per annum on January 1, 2008.
Thereafter, Monthly Payments on the Crystal Gateway Loan will be adjusted to
level payments which will fully amortize such loan sixty months prior to its
original amortization term.
The Crystal Gateway Marriott is a twin tower, 18-story, 697 room
(561,432 square feet), full service hotel located in the Crystal City section
of Arlington, Virginia, between the Pentagon and Washington National Airport,
approximately five miles from Washington, D.C.'s central business district.
The Crystal Gateway Marriott was built on a 145,565 square foot site, one
tower was built in 1982 and the other tower was built in 1986. The Crystal
Gateway Marriott contains two restaurants, a sports bar, approximately 32,000
square feet of conference space, and 700 parking spaces. Other amenities
include an indoor/outdoor swimming pool and exercise facilities. The 12-month
average daily occupancy rate for calendar year 1997 for the Crystal Gateway
Marriott was 82.3% with an average room rate of $127.40. The room mix
includes 374 double-double, 260 king, 59 suites and 4 presidential suites.
The Crystal Gateway Marriott is leased to Marriott Hotel Services, Inc.
("Marriott") pursuant to a triple-net operating lease (the "Marriott Lease")
at an annual rent equal to (a) 3% of gross sales and (b) 50% of net cash flow
after debt service.
The Crystal Gateway Marriott is managed by Marriott.
Under the Marriott Lease, gross sales net of certain expenses (including
the 3% of gross sales described above) are required to be deposited by
Marriott into an account controlled by the Master Servicer. All sums
deposited into such account are allocated to a tax and insurance escrow
sub-account (unless Marriott is retaining sufficient funds under the Marriott
Lease to pay taxes and insurance), a debt service sub-account (until an amount
equal to an entire calendar year's debt service payments under the Crystal
Gateway Loan shall be on deposit in such sub-account) and a replacement
reserve sub-account (unless Marriott is retaining sufficient funds under the
Marriott Lease to pay for recurring replacements), with all remaining funds
being released to the Crystal Gateway Borrower and to Marriott.
There is an unsecured revolving loan (the "Crystal Gateway Junior Loan")
from various partners in the Crystal Gateway Borrower to the Crystal Gateway
Borrower in the maximum principal balance of $4,000,000 outstanding at any
time. The Crystal Gateway Junior Loan is subordinate to the Crystal Gateway
Loan. Upon a default under the Crystal Gateway Junior Loan the holder thereof
will not be entitled to accelerate the debt or pursue any remedies thereunder
at any time that the Crystal Gateway Loan is outstanding.
Operating History
<TABLE>
<CAPTION>
Trailing 12 mos. Originator's
1995 Actual 1996 Actual (9/96-8/97) Actual Underwritten
<S> <C> <C> <C> <C>
EGI $36,254,807 $38,990,880 $41,191,848 $38,812,512
Expenses 24,230,605 25,775,263 26,442,022 25,916,237
NOI $12,024,202 $13,215,617 $14,749,826 $12,896,275
UW Cash Flow $10,955,649
Occupancy 78.90% 79.60% 81.60% 80.03%
OER 66.83% 66.11% 64.19% 66.77%
Revenue per Available Room $89.99 $93.97 $99.87 $94.57
Average Daily Rate ("ADR") $114.06 $118.05 $122.39 $118.17
DSCR based on NOI 2.17x 2.38x 2.66x 2.33x
DSCR based on UW Cash Flow 1.98x
</TABLE>
THE SKYLINE LOAN
The third largest Mortgage Loan (the "Skyline Loan"), which represents
approximately 6.31% of the Initial Pool Balance was originated by the Seller
on December 3, 1997 and has a principal balance as of the Cut-off Date of
$50,615,148. The Skyline Loan is secured by a first deed of trust encumbering
an office building located in Fairfax County, Virginia (the "Skyline
Property"). The Skyline Loan was made to Twelfth Skyline Associates Limited
Partnership and Thirteenth Skyline Associates Limited Partnership, each a
special purpose Virginia limited partnership (collectively, the "Skyline
Borrower") sponsored by the Charles E. Smith Organization which also
sponsored the Crystal Plaza Borrower and the Crystal Gateway Borrower.
The Skyline Loan has a remaining amortization term of 358 months and
matures in January 2028. The Skyline Loan may not be prepaid prior to January
1, 2004. However, the Skyline Loan is subject to Defeasance, in whole or in
part, at any time between March 11, 2000 and December 31, 2003, inclusive. On
or after January 1, 2004, the Skyline Loan may be prepaid, in whole but not
in part, upon payment of a Prepayment Premium based on a Yield Maintenance
calculation. The Skyline Loan is an ARD Loan with an Anticipated Repayment
Date of January 1, 2010, therefore, notwithstanding the foregoing, it may be
prepaid, in whole but not in part, without payment of a Prepayment Premium at
any time six months preceding such Anticipated Repayment Date.
The Skyline Property consists of two office buildings located on
approximately 6.23 acres in Falls Church, Virginia. It is comprised of
509,808 net rental square feet of office space and 15,593 net rentable square
feet of retail space. Four Skyline Place is a 9-story, multi-tenant office
building with below grade parking and 257,135 net rentable square foot
property which was built in 1982. Five Skyline Place is also a 9-story
multi-tenant office building with below grade parking. It is a 291,982 net
rentable square foot building which was built in 1984. Among the larger
tenants leasing space in the Skyline Property are the Justice Department, the
Army Corps of Engineers, the Air Force, the Internal Revenue Service, and
Electronic Data Systems. As of October 1997 the Skyline Property was
approximately 100% leased at an approximate average rent per square foot of
$21.54.
The Skyline Property is managed by Charles E. Smith Real Estate
Services, L.P., an affiliate of the Skyline Borrower. The Skyline Loan
documents provide that the manager can be terminated upon the occurrence of
an event of default under the Skyline Loan or if the net operating income for
the Skyline Property in any fiscal year declines by more than 25% in such
fiscal year from the net operating income of the Skyline Property for the
fiscal year immediately preceding the closing date of the Skyline Loan.
Operating History
<TABLE>
<CAPTION>
Trailing 12 mos. Originator's
1995 Actual 1996 Actual (9/96-8/97) Actual Underwritten
----------- ----------- ------------------ ------------
<S> <C> <C> <C> <C>
EGI $9,877,594 $10,644,717 $11,175,099 $10,950,804
Expenses 3,933,976 3,538,678 3,557,669 3,682,660
---------- ----------- ----------- -----------
NOI $5,943,618 $ 7,106,039 $ 7,617,430 $ 7,268,144
UW Cash Flow $ 6,585,988
Occupancy 95.24% 99.44% 99.76% 95.00%
OER 39.83% 33.24% 31.84% 33.63%
DSCR based on NOI 1.47x 1.76x 1.89x 1.80x
DSCR based on UW Cash Flow 1.63x
</TABLE>
All revenues of the Skyline Property are collected by the property
manager and deposited into a rent account from which funds are swept monthly
into a cash collateral account controlled by the Master Servicer. All funds
deposited into the cash collateral account are allocated to a tax and
insurance escrow sub-account, a debt service sub-account, a replacement
reserve sub-account and a tenant improvement sub-account. Upon the occurrence
of an event of default under the Skyline Loan documents, or if the DSCR falls
below 1.2x, funds on deposit in the rent account shall be swept into the cash
collateral account on a daily basis.
There are several unsecured loans (collectively, the "Skyline Junior
Loan") from various partners in the Skyline Borrower to the Skyline Borrower
which, as of the Cut-off Date, have an aggregate principal balance of
$18,100,552 (which as of December 1997, together with accrued interest
thereon represents an approximately $20,409,278 payment obligation of the
Skyline Borrower). The Skyline Junior Loan is subordinate to the Skyline
Loan. Upon a default under the Skyline Junior Loan the holder thereof will
not be entitled to accelerate the debt or pursue any remedies thereunder at
any time that the Skyline Loan is outstanding.
THE 1065 AVENUE OF THE AMERICAS LOAN
The fourth largest Mortgage Loan (the "1065 Avenue of the Americas
Loan"), which represents approximately 4.97% of the Initial Pool Balance, was
originated by the Seller on November 5, 1997, and has a principal balance as
of the Cut-off Date of $39,904,509. The 1065 Avenue of the Americas Loan is
secured by a first mortgage encumbering an office building located in midtown
Manhattan (the "1065 Avenue of the Americas Property"). The 1065 Avenue of
the Americas Loan was made to TrizecHahn 1065 Avenue of the Americas, LLC
(the "1065 Avenue of the Americas Borrower"), a special purpose Delaware
limited liability company which is controlled by TrizecHahn, a New York Stock
Exchange listed company which, as of December 31, 1997, managed approximately
67 million square feet of office and retail space of which 40 million square
feet was owned by TrizecHahn or its affiliates.
The 1065 Avenue of the Americas Loan has a remaining amortization term
of 357 months and matures in December 2027. The 1065 Avenue of the Americas
Loan may not be prepaid prior to December 1, 2000. On or after December 1,
2000, the 1065 Avenue of the Americas Loan may be prepaid, in whole but not
in part, upon payment of a Prepayment Premium based on a Yield Maintenance
calculation. After April 1, 2003, the 1065 Avenue of the Americas Loan may be
prepaid, in whole or in part, without payment of a Prepayment Premium. The
1065 Avenue of the Americas Loan is an ARD Loan with an Anticipated Repayment
Date of December 1, 2004.
The 1065 Avenue of the Americas Property is a 585,824 square feet office
building located at the corner of Avenue of the Americas and West 40th Street
in midtown Manhattan which was constructed in 1958. As of September 1997, the
1065 Avenue of the Americas Property was approximately 90.4% occupied at an
approximate average rent per square foot of $22.00. The largest tenant, Chase
Manhattan Bank, occupies approximately 11.50% of the gross leasable square
feet of the 1065 Avenue of the Americas Property.
The 1065 Avenue of the Americas Property is managed by TrizecHahn Office
Properties Inc. (the "1065 Manager"), an affiliate of the 1065 Avenue of the
Americas Borrower. The 1065 Avenue of the Americas Loan loan documents
provide that the 1065 Manager can be terminated upon the occurrence of any
event of default under the 1065 Avenue of the Americas Loan.
Operating History
- -----------------
<TABLE>
<CAPTION>
Trailing 12 Originator's
1995 Actual 1996 Actual mos. Actual Underwritten
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
EGI $14,597,834 $13,759,517 N/A $15,090,100
Expenses 8,743,118 7,765,197 N/A 8,108,012
----------- ----------- ---- -----------
NOI $ 5,854,716 $ 5,994,320 N/A $ 6,982,088
NCF N/A $ 5,915,348
Occupancy 97.80% 89.50% 90.40% 90.50%
OER 59.89% 56.44% N/A 53.73%
DSCR based on NOI 1.80x 1.84x N/A 2.15x
DSCR based on UW Cash Flow 1.82x
</TABLE>
Commencing one month prior to the related Anticipated Repayment Date,
all rents from the 1065 Avenue of the Americas Property will be required to
be paid by the tenants directly into a cash collateral account controlled by
the Master Servicer. Funds deposited in such cash collateral account shall be
allocated to a tax and insurance sub-account, a debt service sub-account, an
operation and maintenance expense sub-account and a curtailment reserve
sub-account from which all Excess Cash Flow shall be applied to pay down the
1065 Avenue of the Americas Loan.
THE HOECHST LOAN
The fifth largest Mortgage Loan (the "Hoechst Loan"), which represents
approximately 4.46% of the Initial Pool Balance, was originated by the Seller
on November 7, 1997, and has a principal balance as of the Cut-off Date of
$35,810,400. The Hoechst Loan is secured by a first mortgage encumbering an
office building in Warren, New Jersey (the "Hoechst Property"). The Hoechst
Loan was made to JT Warren L.P., a special purpose Georgia limited
partnership (the "Hoechst Borrower").
The Hoechst Loan has a remaining amortization term of 249 months and
matures in December 2017. The Hoechst Loan may not be prepaid prior to
December 1, 2007. However, the Hoechst Loan is subject to Defeasance, in
whole or in part, at any time between December 1, 2001 and November 30, 2007,
inclusive. On or after December 1, 2007, the Hoechst Loan may be prepaid, in
whole but not in part, upon payment of a Prepayment Premium based on a
sliding scale prepayment calculation.
The Hoechst Property is a 207,727 net rentable square foot corporate
headquarters office facility located on a 31.5 acre site within the 117 acre
Somerset Hills Center at 30 Independence Boulevard, Warren, New Jersey which
was constructed in 1997. It is 100% occupied by Hoechst Celanese Corporation
("Hoechst"). The Hoechst Property is contiguous to the Somerset Hills Hilton
and Route I-78. The Hoechst Property has four stories plus a plaza level.
There are 693 parking spaces in a four-story parking deck and 255 surface
parking spaces. The Hoechst lease, which expires on April 30, 2012, provides
for an average rent per square foot of $24.68 and three five year renewal
options. In addition to the base rent, Hoechst pays 100% of the building's
operating expenses other than expenses incurred for ordinary water
requirements.
Hoechst manufactures and markets chemicals, textile and technical
fibers, polyester resins and films, technical polymers and bulk
pharmaceuticals. Hoechst is an affiliate of the Hoechst Group of Frankfurt,
Germany, one of the world's largest producers of pharmaceuticals,
agricultural products and chemicals. Hoechst is rated "A+" by Standard &
Poor's.
The Hoechst Property is managed by Jamestown Management Corporation, an
affiliate of the Hoechst Borrower. The
Hoechst Loan documents provide that the property manager can be terminated
after an event of default occurs under the Hoechst Loan or if the net
operating income for the Hoechst Property in any year declines by more than
25% from the fiscal year immediately preceding the closing date of the
Hoechst Loan.
All revenues from the Hoechst Property are deposited by Hoechst directly
into a cash collateral account controlled by the Master Servicer. Funds
deposited in such cash collateral account are allocated to a debt service
sub-account, with all remaining funds being released to the Hoechst Borrower.
If Hoechst fails to renew its lease on or before April 30, 2011, all sums
that would have otherwise been released to the Hoechst Borrower shall first
be allocated to a tax and insurance sub-account, a debt service sub-account,
an operation and maintenance sub-account, and a reletting sub-account, with
all remaining funds then being released to the Hoechst Borrower.
Operating History
Originator's
Underwritten
------------
EGI $5,195,595
Expenses 103,912
----------
NOI $5,091,683
Cash Flow $4,708,593
Occupancy 100.00%
OER 2.00%
DSCR based on NOI 1.55x
DSCR based on UW Cash Flow 1.43x
THE SHANNON ENTERPRISES LOAN
The sixth largest Mortgage Loan (the "Shannon Enterprises Loan"), which
represents approximately 4.46% of the Initial Pool Balance, was originated by
the Seller on February 28, 1997, and has a principal balance as of the
Cut-off Date of $35,789,344. The Shannon Enterprises Loan is secured by
cross-collateralized and cross-defaulted first deeds of trust encumbering
eleven apartment properties located in North Carolina (singularly, a "Shannon
Enterprises Property" and collectively, the "Shannon Enterprises
Properties"). The Shannon Enterprises Loan was made to Shannon Enterprises of
the Southeast, LLC, a special purpose North Carolina limited liability
company (the "Shannon Enterprises Borrower").
The Shannon Enterprises Loan has a remaining amortization term of 348
months and matures in March 2027. The Shannon Enterprises Loan may not be
prepaid prior to March 1, 2002. However, the Shannon Enterprises Loan is
subject to Defeasance, in whole or in part, at any time between March 1, 2000
and February 28, 2002 inclusive. On or after March 1, 2002, the Shannon
Enterprises Loan may be prepaid, in whole or in part, upon payment of a
Prepayment Premium based on a Yield Maintenance calculation. The Shannon
Enterprises Loan is an ARD Loan with an Anticipated Repayment Date of March
1, 2007; which, notwithstanding the foregoing, may be prepaid, in whole or in
part, without payment of a Prepayment Premium at any time following six
months preceding such Anticipated Repayment Date.
The Shannon Enterprises Properties consist of eleven apartment complexes
located in the Piedmont Triad region of North Carolina, an eleven county
region with the hub of the area consisting of the cities of Greensboro,
Winston-Salem, and High Point, North Carolina. The Piedmont Triad region is
the second-largest metropolitan area in North Carolina with a Metropolitan
Statistical Area ("MSA") of over 1.1 million people.
No more than three of the Shannon Enterprises Properties may be released
during the term of the Shannon Enterprises Loan,
no more than one of which will be Hunting Valley, Meadow Run, Quail Creek,
Raintree or Willow Bend. Any such release is subject to the following
conditions: (a) such release must be accompanied by a partial prepayment or
partial Defeasance of the Shannon Enterprises Loan equal to 125% of the
allocated loan amount of the Shannon Enterprises Property to be released and
(b) the DSCR of the Shannon Enterprises Loan after such release must be not
less than the greater of (i) the DSCR prior to such release and (ii) 1.56x.
Any partial prepayment or partial Defeasance in order to release a Shannon
Enterprises Property shall be subject to the same terms and conditions
described above applicable to any prepayment or Defeasance.
The Shannon Enterprises Properties are managed by Alliance Management,
Inc., an affiliate of the Shannon Enterprises Borrower. The loan documents
executed in connection with the Shannon Enterprises Loan provide that the
manager can be terminated upon an event of default under the Shannon
Enterprises Loan or if the DSCR for the Shannon Enterprises Properties falls
below 1.56x.
All revenues of the Shannon Enterprises Property are deposited by the
property manager into a rent account from which sums are swept daily into a
cash collateral account controlled by the Master Servicer to fund a tax and
insurance reserve sub-account, a debt service payment sub-account, a
recurring replacement reserve sub-account, and, from and after the related
Anticipated Repayment Date or an event of default, an operation and
maintenance sub-account and a curtailment reserve sub-account from which all
Excess Cash Flow is applied to paydown the Shannon Enterprises Loan with,
prior to such Anticipated Repayment Date and provided no event of default has
occurred and is continuing, all remaining funds being released to the Shannon
Enterprises Borrower.
<TABLE>
<CAPTION>
# of Year Built/ Occupancy Approved
Property Name Units Renovated Location (as of Sept. 97) Value
<S> <C> <C> <C> <C> <C>
Carolina Circle 260 1972 Greensboro, NC 92.7% $8,375,000
Creekbend 268 1974 Greensboro, NC 94.8% $6,250,000
Holiday Manor 94 1967 Greensboro, NC 92.6% $2,325,000
Hunting Valley 96 1972 Greensboro, NC 99.0% $3,290,000
McKnight Manor 140 1967 Greensboro, NC 91.4% $2,950,000
Meadow Run 132 1970 Greensboro, NC 93.9% $3,970,000
Quail Creek 160 1973 Greensboro, NC 94.4% $5,700,000
Raintree 230 1979 High Point, NC 96.5% $6,710,000
Willow Bend 108 1973 Greensboro, NC 88.0% $2,900,000
English Village 176 1959-66 Greensboro, NC 90.3% $2,750,000
Skyline Village 169 1974 Winston Salem, NC 87.1% $2,425,000
</TABLE>
Operating History
- -----------------
<TABLE>
<CAPTION>
Six Months Originator's
1995 Actual 1996 Actual Ending 6/97 Underwritten
<S> <C> <C> <C> <C>
EGI $8,436,373 $8,870,256 $4,460,931 $9,198,182
Expenses 3,537,323 3,984,594 1,921,878 3,825,835
NOI $4,899,050 $4,885,662 $2,539,053 $5,372,346
Occupancy 94.59% 93.97% 92.92% 92.54%
OER 41.93% 44.92% 43.08% 41.59%
DSCR based on NOI 1.56x 1.56x 1.62x 1.71x
DSCR based on UW Cash Flow 1.59x
</TABLE>
THE CRYSTAL PLAZA LOAN
The seventh largest Mortgage Loan (the "Crystal Plaza Loan"), which
represents approximately 4.23% of the Initial Pool Balance was originated by
the Seller on November 20, 1997, and has a principal balance as of the
Cut-off Date of $33,913,562. The Crystal Plaza Loan is secured by a first
deed of trust encumbering a multifamily apartment building located in
Arlington, Virginia (The "Crystal Plaza Property"). The Crystal Plaza Loan
was made to Smith Property Holdings Crystal Plaza L.L.C., a special purpose
Delaware limited liability company (the "Crystal Plaza Borrower") which is
controlled by Charles E. Smith Residential Realty Inc., a New York Stock
Exchange listed real estate investment trust which owns or manages over
24,000 residential units. Charles E. Smith Residential Reality, Inc. is an
affiliate of the Charles E. Smith Organization, the sponsor of the Crystal
Gateway Borrower and the Skyline Borrower.
The Crystal Plaza Loan has a remaining amortization term of 357 months
and matures in December 2027. The Crystal Plaza Loan may not be prepaid prior
to December 1, 2003. However, the Crystal Plaza Loan is subject to
Defeasance, in whole or in part, at any time between March 11, 2000 and
November 30, 2003, inclusive. On or after December 1, 2003, the Crystal Plaza
Loan may be prepaid, in whole but not in part, with payment of a Prepayment
Premium based on a Yield Maintenance calculation. The Crystal Plaza Loan is
an ARD Loan with an Anticipated Repayment Date of November 1, 2009; which,
notwithstanding the foregoing, may be prepaid, in whole but not in part,
without payment of a Prepayment Premium at any time following six months
preceding such Anticipated Repayment Date.
The Crystal Plaza Property is a twelve story, 536 unit, multifamily
apartment building located at 2111 Jefferson Davis Highway in the Crystal
City section of Arlington, Virginia, between the Pentagon and National
Airport, approximately 5 miles from Washington D.C.'s central business
district. The Crystal Plaza Property was constructed in 1967. Amenities
include a 24-hour desk attendant, below grade garage with 581 parking spaces,
pool, party room, laundry facilities, exercise room, community room and a
rooftop deck. As of October 1997 the Crystal Plaza Property was approximately
98.3% leased at an approximate average rent per unit of $1,269.
The Crystal Plaza Property is managed by the Charles E. Smith
Residential Realty, L.P., an affiliate of the Crystal Plaza Borrower. The
Crystal Plaza Loan documents provide that the property manager can be
terminated upon the occurrence of an event of default under the Crystal Plaza
Loan or if the net operating income for the Crystal Plaza Property in any
fiscal year declines by more than 25% in such fiscal year from the net
operating income of the Crystal Plaza Property for the fiscal year
immediately preceding the closing date of the Crystal Plaza Loan.
All revenues of the Crystal Plaza Property are collected by the property
manager and deposited directly into a rent account from which funds are swept
monthly into a cash collateral account controlled by the Master Servicer. All
funds deposited into the cash collateral account are allocated to a tax and
insurance escrow sub-account, a debt service sub-account and a replacement
reserve sub-account. Upon the occurrence of an event of default under the
Crystal Plaza Loan documents, or if the DSCR falls below 1.2x, funds on
deposit in the cash collateral account shall be swept into the cash
collateral account on a daily basis.
The Crystal Plaza Property is encumbered by three deeds of trust which
are subordinate to the lien of the deed of trust securing the Crystal Plaza
Loan. Such subordinate liens secure the Crystal Plaza Borrower's obligation
to pay 5% of net profits (after the payment of debt service and other
expenses) attributable to the Crystal Plaza Property to the fee owner of a
parcel adjacent to the Crystal Plaza Property.
<TABLE>
<CAPTION>
Unit Size W.A. W.A. Rent Monthly
Unit Description Mix Sq. Ft. Size Rent Rent Sq. Ft. Total Rent Total SF
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Efficiencies 92 593-762 701 702-902 820 1.17 75,484 64,516
1 Bedroom - 1 Bath 190 847-1,051 930 958-1,06 995 1.07 189,016 176,650
2 Bedroom - 1 Bath 24 1,224 1,224 1,247-1,285 1,261 1.03 30,257 29,376
2 Bedroom - 2 Bath 149 1,197-1,442 1,321 1,259-1,402 1,348 1.02 200,838 196,900
2 Bed/Den - 2 Bath 23 1,572 1,572 1,474-1,550 1,509 0.96 34,710 36,156
3 Bedroom - 2 Bath 58 1,701 1,701 1,629-1,708 1,667 0.98 96,685 98,658
TOTALS 536 626,989 602,256
AVERAGES 1,124 1,170 1.04
</TABLE>
THE COURT AT DEPTFORD LOAN
The eighth largest Mortgage Loan (the "Deptford Loan"), which represents
approximately 3.76% of the Initial Pool was originated by the Seller on
September 22, 1997, and has a principal balance as of the Cut-off Date of
$30,202,056. The Deptford Loan is secured by a first mortgage (the "Deptford
Mortgage") encumbering a shopping center (the "Deptford Property") called The
Court at Deptford, located in Deptford, New Jersey. The Deptford Loan was
made to Almonesson Associates, L.P. (the "Deptford Borrower"), a special
purpose New Jersey limited partnership. The Deptford Borrower is an affiliate
of the Goldenberg Group. The Goldenberg Group, founded in 1984, has developed
and manages 1.8 million square feet of retail space in the Mid Atlantic
region.
The Deptford Loan has a remaining amortization term of 355 months and
matures in October 2012. The Deptford Loan may not be prepaid prior to
November 1, 2004. On or after November 1, 2004, the Deptford Loan may be
prepaid, in whole but not in part, upon payment of a Prepayment Premium based
on a Yield Maintenance calculation; provided, however, that notwithstanding
the foregoing, it may be prepaid, in whole but not in part, without payment
of a Prepayment Premium at any time following twenty-four months prior to
maturity.
The Deptford Property is an anchored shopping center comprising 343,472
leasable square feet of retail space located in Deptford County in
South-central, New Jersey within the Philadelphia MSA. It was constructed in
1990 and has approximately 1,650 parking spaces. Based on the Deptford
Borrower's August, 1997 rent roll, the Deptford Property was approximately
98.2% leased at an approximate average rent per square foot of $11.98. Among
the larger tenants leasing space at the Deptford Property are Sam's Club
(approximately 120,000 square feet), Circuit City (approximately 32,300
square feet), Sports Authority (approximately 40,200 square feet), RX Place
(approximately 27,100 square feet), Pier 1 Imports (approximately 9,680
square feet) and Ross Dress for Less (approximately 31,071 square feet). Two
restaurants, Red Lobster and The Olive Garden, are located in outparcels
which are not part of the Deptford Property.
The Deptford Property is managed by Goldenberg Management, Inc., an
affiliate of the Deptford Borrower. The Deptford Loan documents provide that
the property manager can be terminated upon the occurrence of an event of
default under the Deptford Loan.
The Deptford Loan documents provide for reserves for taxes, insurance
and on-going replacements. The Deptford Loan documents do not require the
establishment of a lockbox or cash collateral account.
Operating History
- -----------------
<TABLE>
<CAPTION>
8 Months Originator's
1995 Actual 1996 Actual Ending 8/97 Underwritten
<S> <C> <C> <C> <C>
EGI $4,996,281 $5,175,387 $3,451,671 $5,122,742
Expenses 1,527,522 1,500,890 1,050,089 1,518,892
NOI $3,468,759 $3,674,497 $2,401,582 $3,603,850
Underwritten Cash Flow $3,441,129
Occupancy 95.0% 97.0% 98.2% 97.4%
OER 30.6% 29.0% 30.4% 29.6%
DSCR based on NOI 1.27x 1.35x 1.32x 1.32x
DSCR based on UW Cash Flow 1.26x
</TABLE>
THE COSTCO LOAN
The ninth largest Mortgage Loan (the "Costco Loan"), which represents
approximately 3.43% of the Initial Pool was originated by the Seller on
December 22, 1997, and has a principal balance as of the Cut-off Date of
$27,510,820. The Costco Loan is secured by a first mortgage (the "Costco
Mortgage") encumbering fee and leasehold interests in a shopping center (the
"Costco Property") located in Honolulu, Hawaii. The Costco Loan was made
jointly to Poseiden Proteus Partners and MacMaster Limited Partners, both
special purpose Hawaii limited partnerships (collectively, the "Costco
Borrower"). The principal owner of the Costco Borrower is part of the
McNaughton Group. The McNaughton Group is a diversified group of companies
that includes real estate development companies which have developed over 1.6
million square feet of retail space in Hawaii.
The Costco Loan has a remaining amortization term of 358 months and
matures in January 2009. The Costco Loan may not be prepaid prior to February
1, 2002. On or after February 1, 2002, the Costco Loan may be prepaid, in
whole but not in part, upon payment of a Prepayment Premium based on a Yield
Maintenance calculation; provided, however, that notwithstanding the
foregoing, it may be prepaid, in whole but not in part, without payment of a
Prepayment Premium at any time following twelve months prior to maturity.
The Costco Property is a 203,761 square foot retail center located in
the Ewa district of the County of Honolulu on the south side of the island of
Oahu, Hawaii. The Costco Property is comprised of three concrete, tilt-up,
buildings which were constructed in 1987 and is anchored by Price Costco,
which occupies approximately 131,607 square feet and as of the Cut-off Date
was rated "A-" by Standard & Poor's. Based on the Costco Borrower's November,
1997 rent roll, the Costco Property was approximately 100% leased at an
approximate average rent per square foot of $16.48. Among the other larger
tenants leasing space at the Costco Property are Title Guaranty of Hawaii,
Inc. (approximately 11,900 square feet), The Kennel Shop (approximately 9,800
square feet) and Hobbies Hawaii (approximately 8,500 square feet).
The Costco Property is managed by Chaney, Brooks & Company. The Costco
Loan documents provide that the property manager can be terminated upon the
occurrence of an event of default under the Costco Loan.
Operating History
- -----------------
<TABLE>
<CAPTION>
9 Month Originator's
1995 Actual 1996 Actual Ending 9/97 Underwritten
<S> <C> <C> <C> <C>
EGI $4,088,507 $4,103,345 $3,008,148 $3,949,948
Expenses 900,614 913,111 686,447 934,807
NOI $3,187,893 $3,190,234 $2,321,701 $3,015,141
Underwritten Cash Flow $2,908,568
Occupancy 97.7% 99.0% 99.0% 93.5%
OER 22.0% 22.3 22.8% 26.4%
DSCR based on NOI 1.35x 1.35x 1.31x 1.28x
DSCR based on UW Cash Flow 1.23x
</TABLE>
The Costco Loan documents provide for reserves for taxes and insurance,
immediate repairs and on-going replacements. The Costco Loan documents do not
require the establishment of a lockbox or cash collateral account.
THE ONE & OLNEY SQUARE LOAN
The tenth largest Mortgage Loan (the "One and Olney Loan"), which
represents approximately 3.10% of the Initial Pool Balance, was originated by
the Seller on September 10, 1997, and has a principal balance as of the
Cut-off Date of $24,877,953. The One and Olney Loan is secured by a first
mortgage (the "One and Olney Mortgage") encumbering a shopping center (the
"One and Olney Property") known as The One and Olney Square Shopping Center,
located in Philadelphia, Pennsylvania. The One and Olney Loan was made to
Olney Square Associates, L.P., a Delaware limited partnership, and Breslin
Realty Associates, L.P., a special purpose Delaware limited partnership
(collectively, the "One and Olney Borrower"). The principal owner of the One
and Olney Borrower, Mr. Wilbur Breslin, has developed, acquired or has an
interest in over $155 million of commercial and residential properties in the
New York and Philadelphia metropolitan areas.
The One and Olney Loan has a remaining amortization term of 295 months
and matures in October 2007. The One and Olney Loan may not be prepaid prior
to November 1, 2002. On or after November 1, 2002, the One and Olney Loan may
be prepaid, in whole but not in part, upon payment of a Prepayment Premium
based on a Yield Maintenance calculation; provided, however, that
notwithstanding the foregoing, it may be prepaid, in whole but not in part,
without payment of a Prepayment Premium at any time following six months
prior to maturity.
The One and Olney Property is an anchored shopping center comprising
354,518 leasable square feet of retail space located in Philadelphia,
Pennsylvania, which was constructed in 1987. Based on the One and Olney
Borrower's February, 1998 rent roll, the One and Olney Property was
approximately 97.5% leased at an approximate average rent per square foot of
$11.29. Among the larger tenants leasing space at the One and Olney Property
are Shoprite Supermarkets, Inc. (approximately 55,196 square feet), Caldor
Holdings, Inc. (approximately 103,839 square feet), Suzette of Olney Square,
Inc. (approximately 22,700 square feet), United States Postal Service
(approximately 26,974 square feet), Jerusalem Furniture Corp., (approximately
19,000 square feet) and Modell's Pa, Inc. (approximately 13,840 square feet).
The One and Olney Center is managed by Kandor Realty Management, Inc.,
an affiliate of the One and Olney Borrower. The One and Olney Loan documents
provide that the property manager can be terminated upon the occurrence of an
event of default under the One and Olney Loan.
The One and Olney Loan documents provide for reserves for taxes,
insurance, immediate repairs and on-going replacements. The One and Olney
Loan documents do not require the establishment of a lockbox or cash
collateral account.
Operating History
- -----------------
<TABLE>
<CAPTION>
6 Months Originator's
1995 Actual 1996 Actual Ending 6/97 Underwritten
<S> <C> <C> <C> <C>
EGI $4,823,281 $4,930,357 $2,297,567 $5,015,357
Expenses 1,285,072 1,328,333 584,706 1,406,460
NOI $3,538,209 $3,602,024 $1,712,861 $3,608,897
Underwritten Cash Flow $3,398,611
Occupancy 98.3% 97.2% 97.2% 95.0%
OER 26.6% 26.9% 25.4% 28.0%
DSCR based on NOI 1.46x 1.49x 1.41x 1.49x
DSCR based on UW Cash Flow 1.40x
</TABLE>
BASIC CAPITAL MANAGEMENT
Nine of the Mortgage Loans, representing in the aggregate approximately
2.28% of the Mortgage Loans by principal balance as of the Cut-off Date, are
indirectly owned by publicly traded entities controlled by Basic Capital
Management, Inc. ("BCM"). The borrowing entities for each of these Mortgage
Loans are newly created, single purpose entities. None of these Mortgage
Loans are cross-collateralized or cross-defaulted with any other Mortgage
Loan. BCM is a privately-held Nevada corporation owned and controlled by the
family of Gene S. Phillips, former chairman of Southmark Corporation, a real
estate syndicator ("Southmark") and parent of San Jacinto Savings Association
("San Jacinto"). Southmark filed for bankruptcy in July 1989 and San Jacinto
was declared insolvent and placed in receivership by federal authorities in
December 1990. The nine Mortgage Loans are Woodland Hills Apartments, San
Antonio, Texas; Treehouse Apartments, Alamo Heights, Texas; East Point
Apartments, Mesquite, Texas; Villa Maria Health Care Center, Tucson, Arizona;
Applecreek Apartments, Dallas, Texas; Parkway Centre, Farmers Branch, Texas;
Fairways Apartments, Longview, Texas; Forest Ridge Apartments, Denton, Texas;
and Harbor Plaza Shopping Center, Aurora, Colorado.
