| 1E - DSCR < 1.10, 4A- Occ < 80% U/W occ, and 1F- DSCR < 1.40 and <= 75% U/W DSCR. The loan is secured by a 22 unit multifamily property in Turnwater, PA built in 2006. The property was inspected on 10/30/08; rated in Excellent condition. The YE 2008 NCF DSCR is .85 with an occupancy of 72%. The decline in NCF is a result of an EGI decline combined with increased operating expenses. Although 2008 EGI has increased 3% from YE 2007, 2008 EGI still shows a 3% decline from U/W due to the 24% decline in Occupancy from YE 2007 and 20% decline from U/W. Per the May 2009 rent roll, occupancy has increased to 86.36%. Asking rents for vacant units are at market rents as per the 05/2009 rent roll. Per the 05/09/ rent roll, market rents are $941.67. The property is advertised/marketed via numerous on-line media, including “For Rent”, signage on the property, resident and business referral incentives, & brochures. 2008 operating expenses have increased over 80% from YE 2007 and 90% from U/W due to higher than normal UTIL, PAY, and GEN/ADMIN expenses. Per Bwr, payroll has increased becuase Phase I is still seeing some residual additional leasing staff cost related to the lease-up of Phase II, but Bwr expects the payroll amount to drop back to the budgeted level as of the July reporting period. Per Bwr, payroll is reported one month in arrears, and Bwr has cut additional leasing staff back to the budgeted 22 hours as of the first of May, as Phase II is now stabilized. Gen/Admin expenses have risen as a result of increased office supplies and furniture rentals. Bank of America will continue to monitor the loan.
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