Fitch Ratings has affirmed all classes and Rating Outlooks of 1345 Avenue of the Americas and Park Avenue Plaza Trust, series FB 2005-1 Commercial Mortgage Pass-Through Certificates.

RATING ACTIONS

Entity / Debt

Rating

Prior

1345 Avenue of the Americas and Park Avenue Plaza Trust FB 2005-1

A-3 68275CAC2

LT

AAAsf

Affirmed

AAAsf

B 68275CAD0

LT

AAAsf

Affirmed

AAAsf

C 68275CAE8

LT

AAAsf

Affirmed

AAAsf

D 68275CAF5

LT

AAsf

Affirmed

AAsf

E 68275CAG3

LT

AAsf

Affirmed

AAsf

F 68275CAH1

LT

Asf

Affirmed

Asf

Page

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VIEW ADDITIONAL RATING DETAILS

KEY RATING DRIVERS

Continued Paydown/Stable Cash Flow: The affirmations reflect the transaction's continued paydown, stable to improving cash flow, low trust leverage and strong experienced sponsorship. The Positive Outlook for class D reflects paydown since issuance (the transaction has been paid down 38%) and the potential for an upgrade once there is clarity regarding the AllianceBernstein space.

Substantial Rollover Prior to Loan Maturity; Recent Leasing: According to the December 2022 rent roll, 1345 Avenue of the Americas was estimated to be 88% leased, up from 84% in September 2021. The sponsor secured leases to four new tenants in the first half of 2022 comprising 85,000 sf (4% of NRA). As of January 2023, a portion of the space leased to Allianz Asset Management has been backfilled by Equitable Financial Life (4.2% of NRA) on a 16-year lease.

The largest tenant at the property, Alliance Bernstein (50.2% of NRA), moved its corporate headquarters to Nashville, TN and is currently subletting 46% of its space; however, their lease runs through the end of December 2024 with no early termination options. Terms of the sublease were not available nor were there any updates from the sponsor regarding a potential direct lease after the expiration of the AllianceBernstein lease.

Quality Asset in Prime Midtown Manhattan Locations: The certificates are backed by a loan on a high-quality office property located in Midtown Manhattan. The 1345 Avenue of the Americas loan is secured by the fee and leasehold interests in a 50-story, 2.0-million-square foot (sf) office building located on the west side of Avenue of the Americas between West 54th and West 55th Streets. The building was built in 1969 and is located four blocks south of Central Park. The sponsor has reportedly invested $120 million in renovations, including a redesign of the lobby, elevators, amenities and outdoor spaces.

Leasing Reserves: The sponsor has maintained leasing reserves of $5.0 million at 1345 Avenue of the Americas. During the last three years of the loan's term, if specified occupancy and cash flow hurdles are not attained, additional reserves in the aggregate amount of $38 million is required to be collected to cover re-leasing costs.

Low Leverage & Amortization: The trust loan continued to amortize through August 2022 and converted back to interest-only in September 2022. The trust balance at maturity will be $406.1mm ($204 psf).

The Fitch stressed debt service coverage ratio (DSCR) and loan-to-value (LTV), inclusive of the pro-rata non-trust notes, is 1.51x and 58.2%, respectively, with total trust debt per square foot of approximately $211. There are $82.2 million in pari passu notes held outside of the trust. Further, there are $100 million in subordinate notes on 1345 Avenue of the Americas and mezzanine debt of approximately $130 million.

Experienced Sponsorship: The collateral properties benefit from the committed sponsorship and experienced property management of Fisher Brothers, which developed both of the properties, invested substantially in their modernization and has significant equity to preserve.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to negative rating action/downgrade:

Downgrades are not expected due to the low trust leverage but may be possible with significant and sustained occupancy and cash flow declines. Revenues from parking and other income declined in 2021 likely due to the pandemic; downgrades are possible if these revenue streams fail to recover. Additionally, building expenses may increase starting in 2024 due to the recently passed Local Law 97, which requires building owners in New York City to reduce carbon emissions.

Factors that could, individually or collectively, lead to positive rating action/upgrade:

An upgrade to class D is possible should the borrower be able to successfully manage the upcoming roll, particularly for the Alliance Bernstein space. However, class D's Outlook may be revised to Stable if there is no clarity on the subleases and the sponsor fails to secure a replacement tenant. Upgrades to classes E and F are possible if the borrower maintains the property's historically high occupancy rate and there is sustained cash flow improvement.

Best/Worst Case Rating Scenario

International scale credit ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit https://www.fitchratings.com/site/re/10111579.

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

Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

ESG Considerations

Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg

Additional information is available on www.fitchratings.com

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