OREANDA-NEWS. Fitch Ratings has upgraded one, downgraded one, and affirmed three classes of GE Commercial Mortgage Corporation (GECMC) commercial mortgage pass-through certificates series 2005-C2. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS
The upgrade to class H reflects the increase in credit enhancement due to significant loan paydown since Fitch's last rating action. The downgrade to class J reflects an increase in expected losses to the specially serviced loans. Fitch modeled losses of 54.3% of the remaining pool; expected losses on the original pool balance total 4.2%, including $53.5 million (3.1% of the original pool balance) in realized losses to date.

As of the March 2016 distribution date, the pool's aggregate principal balance has been reduced by 98% to $33.6 million from $1.7 billion at issuance. The pool is highly concentrated with only three of the original 142 loans remaining. The top two loans are currently in special servicing (88.3%), of which one is real estate owned (REO) (66.8% of the pool) and the other is in process of foreclosure (21.5%). The non-specially serviced loan is fully amortizing, and matures in May 2025. Interest shortfalls are affecting classes J through Q.

The largest loan in the pool is the specially-serviced Chatsworth Business Park loan (66.8% of the pool), which is secured by a 231,770 square foot (sf) office property in Chatsworth, CA. The loan had transferred to special servicing in March 2010 for imminent maturity default, followed shortly thereafter by the maturity of the loan in April 2010. The lender foreclosed on the property and the asset has been REO since August 2012. The asset was offered for sale in an October 2013 auction, but did not sell. The property further experienced cash flow issues in 2014 when the second largest tenant, Sanyo North America Corp. (previously 29% of the net rentable area [NRA]) vacated in 2014 prior to its February 2017 lease expiration. The property is currently 71% leased by a single tenant, County of LA, whose lease recently expired on March 15, 2016. A replacement tenant has not yet been identified for the vacant space, and the servicer is currently in negotiations to extend the County of LA lease.

The second largest loan in the pool is a specially serviced 44,264 sf retail center located in Salisbury, MD (21.5%). The property's major tenant is Barnes & Noble (50% NRA) whose lease expires in April 2018. Occupancy declined to 77.6% as of January 2016, down from 85% in December 2014 due to Sleepy's (previously 7.5% NRA) vacating in February 2015. According to the servicer the borrower was unable to refinance the loan due to the occupancy decline, and the loan transferred to special servicing in May 2015 for maturity default. A receiver is in place, and the servicer expects to obtain title and complete the foreclosure by second quarter 2016.

The remaining loan in the pool is secured by 93,522 sf grocery anchored retail property in Phoenix, AZ. The original grocery anchor had occupied approximately 66,000 sf (71% NRA) prior to its parent company filing for bankruptcy in May 2013. The lease was subsequently acquired by a new grocer entity, which reduced the footprint at the property to 47,585 sf (50%).

As a result, occupancy declined, reporting at 79% for June 2015 and December 2014, compared to 99% in December 2013. The net operating income (NOI) debt service coverage ratio (DSCR) reported at 2.0x for as of year-to-date June 2015, compared to 1.82x at year end (YE) December 2014 and 2.24x at YE December 2013. The fully amortizing loan matures in May 2025, and has remained current since issuance.

RATING SENSITIVITIES
The Rating Outlook on class H is considered Stable as credit enhancement is high and downgrades are not expected. Further upgrades were not warranted, however, as the transaction is highly concentrated with only three loans remaining, with the top two in special servicing (88.3%). Further downgrade to the distressed classes J is possible should additional losses be realized.

DUE DILIGENCE USAGE
No third-party due diligence was provided or reviewed in relation to this rating action.

Fitch upgrades the following class and assigns Rating Outlook as indicated:
--$3.3 million class H to 'Bsf' from 'CCCsf'; Stable Outlook.

Fitch downgrades the following class as indicated:
--$21 million class J to 'Csf' from 'CCsf'; RE 60%.

Fitch affirms the following classes:
--$9.3 million class K at 'Dsf'; RE 0%;
--$36,082 class L at 'Dsf'; RE 0%;
--$0 class M at 'Dsf'; RE 0%.

The class A-1, A-2, A-3, A-AB, A-4, A-1A, A-J, B, C, D, E, F, and G certificates have paid in full. Fitch does not rate the class N, O, P and Q certificates. Fitch previously withdrew the ratings on the interest-only class X-C and X-P certificates.