Job Turnover Hurts Criimi Mae's Ratings

Fitch Ratings, New York, has downgraded Criimi Mae's special servicer rating to "CSS3+" from "CSS2+" and primary servicer rating to "CPS2-" from "CPS2," while affirming the Rockville, Md.-based mortgage real estate investment trust's master servicer rating at "CMS3."

The credit rating agency said that the primary servicer rating downgrade reflects Criimi's "decreased emphasis" on this business line, while the special servicer rating downgrade takes into account new management at the REIT, and high employee turnover.

Although Fitch regards the new management team as "well experienced," the rating agency believes that "the direction and leadership of the company has been significantly altered, essentially creating a new company" which has not yet established itself. As well, Fitch reports that employee turnover at Criimi Mae for the 12-month period ending April 2004 was at 50%, with 47% of this occurring "above the administrative level."

This rate is "well above" that for other servicers rated by Fitch, the rating agency said.

Even though Criimi Mae has sold its commercial mortgage-backed securities master and primary servicing contracts, Fitch said, they continue to maintain personnel and "relevant policies and procedures" to take advantage of new servicing opportunities.

As of March 2004, Criimi Mae Services was special servicer on 32 CMBS transactions, representing a base of 3,155 loans totaling $16.6 billion, Fitch reports.

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