Fitch Affirms MSCI 2007-IQ15

Fitch Ratings has affirmed 15 classes of Morgan Stanley Capital I Trust, series 2007-IQ15 (MSCI 2007-IQ15) Mortgage Pass-Through Certificates, Series 2015-GC34. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmation of the senior classes reflects sufficient credit enhancement relative to pool expected losses.

As of the September 2016 distribution date, the pool's aggregate principal balance has been reduced by 40.7% to $1.2 billion from $2.05 billion at issuance. Per the servicer reporting, five loans (8% of the pool) are defeased. Interest shortfalls are currently affecting classes D through P.

Modeled Losses: Fitch modeled losses of 8.8% of the remaining pool; expected losses on the original pool balance total 13.5%, including $169.6 million (8.3% of the original pool balance) in realized losses to date. Realized losses to the transaction since last review were minimal at $366,000.

Loans of Concern: Fitch has designated 27 (52%) Fitch Loans of Concern, including six of the top ten loans in the pool. There is one specially serviced loan (0.7%). The loan, which is secured by an industrial property located in Dekalb, IL, recently transferred due to a maturity default; the largest tenant (91% of the NRA) is expected to vacate the property at the end of the month.

Increasing Concentration: The portfolio is becoming increasingly concentrated with approximately 97 loans (including two crossed collateralized pools) remaining in the pool; the top two loans comprise 32.5% of the remaining pool. Further, there are significant upcoming loan maturities with over 90% of the pool scheduled to mature by August 2017.

Largest Contributors to Modeled Losses: The largest contributor to expected losses is the First Stamford loan (19.4% of the pool), which is secured by a 790,000 square foot (sf) suburban office property located in Stamford, CT. Property performance has continued to show improvement with the year-end (YE) 2015 servicer-reported DSCR at 1.13x compared with YE 2014 at 1.08x and YE 2013 at 0.93x. The property occupancy, which was reported at 95.5% as of June 2016, continues to outperform the submarket. Per Reis, the second quarter 2016 reported vacancy rate for the Stamford CBD submarket was 27.8%. Over 40% of the NRA is leased to nationally recognized tenants with long-term leases expiring in 2019 and beyond. There is approximately 7.5% tenant roll through 2017. The loan matures in July 2017.

The next largest contributor to losses is the AES Building loan (2.6% of the pool), which is secured by a leasehold interest in a 430,000 sf office building located in Akron, OH. As of the August 2016 rent roll, approximately 65% of the property was leased to over 15 tenants, including two new tenants (11% of NRA) that have not yet commenced occupancy. Property occupancy dropped significantly after the largest tenant, Advanced Elastomer Systems (33% of NRA), an ExxonMobil subsidiary, vacated as expected at lease expiration in 2015. The borrower continues to try and re-lease the vacant space. Fitch will continue to monitor the property for leasing updates.

The third largest contributor to losses is the 717 Texas Avenue loan (13.1% of the pool), which is secured by a 696,000-sf LEED certified 33-sotory office property located in the Houston, TX CBD. As of June 2016 rent roll, the property remained 99.9% leased with less than 1% roll through year end 2017. The property has a significant concentration of tenants involved in the energy industry. The largest tenant is Freeport McMoRan Oil & Gas LLC (51% of NRA, through August 2018). Approximately four floors (16% of NRA) leased to Freeport McMoRan in July 2015 are marked as 'leased but unoccupied' per the rent roll. While the servicer was unable to provide an update on the tenant, recent news reporting stated that the company has placed all its space at the subject for sub-lease. Further reporting noted that the company has been undergoing a re-structure, and per 2016 company statements, it has been making job cuts over the past year. Fitch will continue to monitor the occupancy status of the subject.

RATING SENSITIVITIES

The Stable Outlooks on classes A-1A, A-4 and A-M reflect the class's sufficient credit enhancement and expectation of continued pay down. The 'AAAsf' and 'Asf' ratings reflect additional stresses in its base case analysis to factor in refinancing risks. Any upgrade to class A-M may be limited due to the increasing concentration of the pool. The distressed classes (those rated below 'Bsf') may be subject to further downgrades as additional losses are realized.

USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10

No third-party due diligence was provided or reviewed in relation to this rating action.

Fitch has affirmed the following ratings:

--$546.7 million class A-4 at 'AAAsf'; Outlook Stable;

--$225 million class A-1A at 'AAAsf'; Outlook Stable;

--$205.4 million class A-M at 'Asf'; Outlook Stable;

--$177.1 million class A-J at 'CCCsf'; RE 80%;

--$33.4 million class B at 'CCsf'; RE 0%.

--$15.4 million class C at 'Csf'; RE 0%;

--$15.3 million class D at 'Dsf'; RE 0%;

--$0 class E at 'Dsf'; RE 0%;

--$0 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%.

Classes A-1, A-2, and A-3 have paid in full. Fitch does not rate the class M, N, O and P certificates. Fitch previously withdrew the rating on the interest-only class X certificates.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 01 Sep 2016)

https://www.fitchratings.com/site/re/886006

Criteria for Rating Caps and Limitations in Global Structured Finance Transactions (pub. 16 Jun 2016)

https://www.fitchratings.com/site/re/882401

Global Structured Finance Rating Criteria (pub. 27 Jun 2016)

https://www.fitchratings.com/site/re/883130

U.S. and Canadian Fixed-Rate Multiborrower CMBS Surveillance and U.S. Re-REMIC Criteria (pub. 13 Nov 2015)

https://www.fitchratings.com/site/re/873395

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1013447

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1013447

Endorsement Policy

https://www.fitchratings.com/regulatory

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