Fitch Ratings has downgraded 14 classes of JP Morgan Chase Commercial Mortgage Securities Corp., Series 2006-LDP9 commercial mortgage pass-through certificates.
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 include 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. Following a court decision that prohibited the borrower from increasing rents on rent-controlled/stabilized units, the borrower is expected to have challenges executing its business plan, Fitch says. The loan transferred to the special servicer in June 2011 for imminent default. Workout discussions are ongoing.