The lagging performance of certain commercial and multifamily properties, including one containing the Credit Suisse (CS) headquarters in Manhattan, prompted Fitch Ratings to downgrade nine classes of mortgage-backed securities.

Analysts lowered ratings due to value declines in 15 large loans and lowered current valuations of commercial loans already in special servicing.

The aggregate principal balance for the loans in the pools fell to $3.89 billion at the end of January, down about 8% from $4.22 billion at issuance.

The largest contributor to the pool's expected losses is the loan on 11 Madison Ave., New York, which represents 20% of the pool, and is backed by a 29-story office tower in Manhattan. The property is the U.S. headquarters for Credit Suisse, which leases 82% of the building's space.

Fitch said occupancy in the Credit Suisse building is stable, but cash flow appreciation will be watered down by lower market lease rates, relative to what the rates were when the loan was originated.

The Credit Suisse mortgage trust also is impacted by a specially serviced loan, which is secured by 14 multifamily properties in Nevada, Texas, Maryland, Florida and South Carolina. 

The servicer said the properties are in foreclosure and likely marketed for sale. Fitch said losses are expected when the loan is finally sold.

The downgrades are tied to expectations of increased deterioration across the pool of loans and losses tied to specially serviced loans. Cumulative interest shortfalls on the pool hit $10.5 million in January.

To date, 41 commercial mortgages or 35.2% of the pool, remain classified as loans of concern and 14 of those are specially serviced loans. Six of the specially serviced loans are more than 90-days delinquent, four are real estate owned and two are in foreclosure.

One of the largest contributors to the pool's expected losses is a loan secured by 73 multifamily properties with 6,892 units in eight states. In January, the loan was more than 90-days delinquent. The loan's special servicer says a foreclosure is being dual-tracked with ongoing forbearance discussions.

Another major contributor to the expected losses is a portfolio of nine office properties, most of which are in Overland Park, Kan.

"Four of the nine properties in the portfolio have a debt service coverage ratio below 1.0x on a standalone basis. Additionally, according to the September 2011 rent roll, over 76% of the net rentable area expires prior to the loan's maturity in July 2017 and the current market's vacancy is 20%," Fitch analysts said, adding that "there are significant upcoming near-term lease rollovers," as well.