Fitch Affirms GECMC 2006-C1

Fitch Ratings has affirmed 17 classes of GE Commercial Mortgage Corporation commercial mortgage pass-through certificates series 2006-C1 (GECMC 2006-C1). A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmations are due to the relatively stable performance of the remaining pool since the last rating action. Fitch modeled losses of 8.8% of the remaining pool; expected losses on the original pool balance total 11.2%, including $75.5 million (4.7% of the original pool balance) in realized losses to date. Fitch has designated 23 loans (25.8%) as Fitch Loans of Concern, which includes five specially serviced assets (13.5%).

As of the February 2015 distribution date, the pool's aggregate principal balance has been reduced by 25.5% to $1.2 billion from $1.61 billion at issuance. Per the servicer reporting, 16 loans (24% of the pool) are defeased. Interest shortfalls are currently affecting classes B through P.

The largest contributor to expected losses, which remains the same since the last rating action, is the largest specially serviced asset, 33 Washington (4.3% of pool). The asset is a 19-story, 447,072 square foot (sf) office building located in the central business district of Newark, NJ. The loan was transferred to special servicing in November 2011 due to delinquent payments. The asset became real-estate owned in May 2013.

Vacancy continues to be a major concern at the property. According to the January 2015 rent roll, the property was 16.7% occupied with six tenants, down from 32.9% at year-end (YE) 2012 and representing a significant decline from 94.6% at issuance. Horizon Healthcare Services, Inc. (7.9% of net rentable area [NRA]) vacated upon the lease expiration in October 2014. The largest remaining tenant is The State of New Jersey Department of Treasury (8.7% of NRA), which has a lease expiration in September 2017 and has expressed a desire to remain at the property. The second largest remaining tenant is Air Express International (6.5% of NRA), which just renewed their lease for another three years through August 2017. The servicer reports that leasing efforts are ongoing and the plan is to hold the asset in the near term as the vacancy issues are addressed. The latest reported valuation indicates significant losses upon liquidation.

The next largest contributor to expected losses is the $50 million (4.2% of the pool) pari-passu portion of the James Center loan (totaling $150 million). The loan is secured by three adjacent class-A office buildings totaling approximately one million sf in the CBD of Richmond, VA. It was transferred to the special servicer in June 2014 for imminent default due to a major tenant vacating. The largest tenant, McGuireWoods, LLP, occupies 25% of the NRA and has a lease expiration in August 2015, upon which the tenant will vacate. The second and third largest tenants, Wells Fargo Bank, N.A. (16% of NRA) and Davenport & Company, LLC (8% of NRA), are both on long-term leases through February 2020 and January 2022, respectively. As of June 2014, the debt service coverage ratio was reported to be 1.49x and occupancy was 89%. The servicer reports that proposals are currently being reviewed from the borrower which includes a possible modification.

The third largest contributor to expected losses is the specially-serviced asset Grand Marc at Riverside (3.5%), which is secured by a 212 unit, 756 bed student housing property located in Riverside, CA. The property is located one mile from the University of California at Riverside and approximately three miles from the Riverside Community College. Foreclosure was completed and the asset become real-estate owned in March 2014. As of the January 2015 rent roll, the property was 96.6% occupied, representing a significant increase from the 44% reported on the July 2013 rent roll and 65% at year-end 2012. Occupancy is back to historical levels, which was 92% in 2011, 98% in 2010, and 97% in 2009. The servicer's plan is to complete some capital items in order to update the property, so that it can be more competitive with newer and recently updated student properties in the area. The servicer also indicated that a disposition of the asset is possible in the fourth quarter of 2015.

RATING SENSITIVITIES

The ratings on the super senior and mezzanine 'AAAsf' rated classes are expected to remain stable due to sufficient credit enhancement, stable collateral performance, and continued paydown. The Negative Rating Outlook on class A-J reflects the uncertainty and timing surrounding the workout of the specially serviced assets and the possibility for downgrades should realized losses exceeds Fitch's expectations. Distressed classes (those rated below 'B') will be subject to downgrades as losses are realized.

Fitch affirms the following class and revises the RE as indicated:

--$36.2 million class B at 'CCsf', RE 15%.

Fitch affirms the following classes as indicated:

--$593.6 million class A-4 at 'AAAsf', Outlook Stable;

--$198.3 million class A-1A at 'AAAsf', Outlook Stable;

--$160.9 million class A-M at 'AAAsf', Outlook Stable;

--$146.8 million class A-J at 'Bsf', Outlook Negative;

--$14.1 million class C at 'Csf', RE 0%;

--$24.1 million class D at 'Csf', RE 0%;

--$14.1 million class E at 'Csf', RE 0%;

--$10.9 million class F at 'Dsf', RE 0%;

--$0 class G at 'Dsf', RE 0%;

--$0 class H at 'Dsf', RE 0%;

--$0 class J at 'Dsf', RE 0%;

--$0 class K at 'Dsf', RE 0%;

--$0 class L at 'Dsf', RE 0%;

--$0 class M at 'Dsf', RE 0%;

--$0 class N at 'Dsf', RE 0%;

--$0 class O at 'Dsf', RE 0%.

The class A-1, A-2, A-3 and A-AB certificates have paid in full. Fitch does not rate the class P certificates. Fitch previously withdrew the rating on the interest-only class X-W certificates.

Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 10, 2014 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at 'www.fitchratings.com' under the following headers:

Structured Finance >> CMBS >> Criteria Reports

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (Aug. 4, 2014);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 10, 2014).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=980749

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