Morgan Stanley CMBS Classes Downgraded

Four classes of Morgan Stanley Capital I Inc. commercial mortgage pass-through certificates, series 2003-TOP11, have been downgraded by Moody's Investors Service.The downgrades were as follows: class J, from Ba3 to B1; class K, from B1 to B2; class L, from B2 to B3; and class M, from B3 to Caa1. Moody's also confirmed or affirmed the ratings on 13 other classes in the deal. The rating agency said the downgrades were due to the performance of two specially serviced loans. The Alabama/Arizona Warehouse/Distribution Loan was transferred to special servicing in January 2004 due to the bankruptcy filing of KB Toys, the only tenant of the two warehouse distribution facilities -- in Montgomery, Ala., and Glendale, Ariz. -- securing the loan, Moody's said. It is not known whether KB will accept any of the distribution center leases. The Troy Technology Park Portfolio Loans, secured by 11 flex/industrial buildings in Troy, Mich., were transferred to special servicing in November 2004 due to imminent default, Moody's said. At securitization the complex was 98.0% leased, but is now only 44.0% leased. "Although the loan has been delinquent since the December payment, the borrower is cooperating with the special servicer on the resolution of the loan," Moody's said.