Fitch Affirms Morgan Stanley Capital I Trust, 2011-C2

Fitch Ratings has affirmed all 12 classes of Morgan Stanley Capital I Trust 2011-C2 commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this release.

KEY RATINGS DRIVERS

The affirmations are based on the stable performance of the underlying collateral pool. As of the March 2015 remittance, there have not been any defaulted or specially serviced loans, and there are no Fitch Loans of Concern. There are seven loans on the servicer's watchlist (11.9%). Two of these loans, in the Top 15, are designated as Fitch Loans of Concern for decreases in net operating income (NOI) from occupancy declines. Two loans (2.0%) are defeased. The transaction is geographically concentrated with 35.3% of the pool located in Texas and 56.5% of those properties located in the Houston metropolitan statistical area (MSA).

The pool's aggregate principal balance has been paid down by 5.7% to $1.145 billion from $1.214 billion at issuance. Forty-three of the 51 loans (84.3% of the pool) reported at least partial year 2014 financials. Although not directly comparable, based on annualized financial statements, the pool's NOI improved 2% since last year's review.

The largest Fitch Loan of Concern (4.3%) is secured by Towne West Square Mall, a 945,000 sf regional mall, of which 448,760 sf is collateral for the loan, located in Witchita, KS. The mall's sponsor is Washington Prime Group. The mall's four non-collateral anchors are Dillard's Women's & Home, Dillard's Men's & Children's, Dick's Sporting Goods, and JC Penney. The subject serves a large trade area as it is one of two regional malls in the greater Wichita market. The occupancy as of December 2014 was 78% versus 81% at issuance; the last reported debt service coverage ratio (DSCR) was steady at 1.58x. The property could experience performance volatility over the next 12 months as leases on 52% of the net rentable area expire at the subject. In addition, a non-collateral anchor, Sears, vacated the mall in December and the sponsor is strategically accessing the best plan for backfilling the anchor space.

The second largest Fitch Loan of Concern is collateralized by Riverside 5, a 121,863 square foot (sf) mid-rise suburban office located in Frederick, MD. The subject is located adjacent to the National Cancer Institute Research Facility and the tenant base consists of General Services Administration entities and governmental contractors. The subject was fully occupied from issuance through mid-2014 until occupancy dropped to a low of 66% after Metro Federal Frederick, LLC vacated its premises. The sponsor secured two new tenants and raised occupancy to 82% by the end of 2014. Servicer commentary indicates that a non-government tenant intends to expand during 2015 on the third floor and the borrower continues to aggressively market the property within the market. The suburban DC market has a number of submarkets, including Frederick, with vacancy rates approaching 20%. Fitch will monitor the building's occupancy rates as federal entities continue to look for cost savings due to government appropriation cuts.

The largest loan of the pool (12.7%) is secured by Deerbrook Mall located in Humble, TX. The regional mall consists of 1,203,612 square foot (sf), of which 554,461 sf is collateral for the loan. The sponsor of the loan is General Growth Properties. The mall has four non-collateral anchors, including Dillard's, Macy's, Sears, and JC Penney. The closest competitor is another GGP owned regional mall located more than 21 miles to the southwest. The occupancy as of June 2014 was 99% versus 98% at issuance and the second-quarter 2014 reported debt service coverage ratio (DSCR) was 1.75x.

RATINGS SENSITIVITIES

All classes maintain Stable Outlooks. Due to the recent issuance of the transaction and the stable performance, Fitch does not foresee positive or negative ratings migration until a material economic or asset level event changes the transaction's overall portfolio-level metrics. Additional information on rating sensitivity is available in the report 'Morgan Stanley Capital I Trust, 2011-C2' (June 28, 2011), available at www.fitchratings.com.

Fitch has affirmed the following classes as indicated:

--$360.3 million class A-2 at 'AAAsf'; Outlook Stable;

--$89 million class A-3 at 'AAAsf'; Outlook Stable;

--$439.5 million class A-4 at 'AAAsf'; Outlook Stable;

--$45.5 million class B at 'AAsf'; Outlook Stable;

--$50.1 million class C at 'Asf'; Outlook Stable;

--$31.9 million class D at 'BBB+sf'; Outlook Stable;

--$50.1 million class E at 'BBB-sf'; Outlook Stable;

--$15.2 million class F at 'BB+sf'; Outlook Stable;

--$12.1 million class G at 'BBsf'; Outlook Stable;

--$15.2 million class H at 'B-sf'; Outlook Stable;

--$888.8 million class X-A at 'AAAsf'; Outlook Stable;

Class A-1 has paid in full. Fitch does not rate class J and X-B.

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

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 20, 2014);

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

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=981985

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