| 1E - DSCR < 1.10 and 1F - DSCR drop from U/W. The loan is secured by a 242 unit Multi-family complex in Philadelphia, PA. The property was last inspected on 11/10/2008; rated in Good condition. Q1-2009 NCF DSCR is .58 with an occ of 90%; YE 2008 NCF DSCR was .46x with an occupancy of 88%. The decline in NCF is a result of increased operating expense each year when compared to U/W and prior years. Ann 2009 operating exp show a 6% increase from YE 2008 & are 46% higher than anticipated than U/W. It is noted that Ann 2009 operating expenses are 2% lower from YE 2007 and YE 2006. The higher operating expenses are a result of increased real estate taxes, insurance, payroll, and utilities. Per the property manager, water rates for the city of Philadelphia have tripled in the last few years. Recommendations from an energy consultant are to reduce the water meter size, which will reduce the water tax, from 6\'' to 4'' and save the property $17K per year. An additional $45K can also be saved by installing sub-traction meters which will measure water returned to the sewer system already treated and therefore taxed at a lower rate. Payroll expenses have risen as a result of increased salaries for all hourly employees. Borrower anticipates that 2009 operating expenses will decrease from 2008 and prior years. Rental concessions are offered in the form of Discount of $100 or $50 off first month rent. The property is marketed via the internet. Bwr anticipates to increase rental rates in 2009 as follows: 5% for current renewal tenants below market rent, and market rents for incoming tenants will remain the same. Bank of America will continue to monitor the loan.
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