msci 2006-xlf

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www.fitchratings.com

Commercial MortgagePresale Report

Morgan Stanley Capital I Inc.,

Series 2006-XLF

$1,555,349,207 Commercial

Mortgage Pass-Through

Certificates*

Subor-

dination

Class Ratings (%)

$890,000,000 A-1 AAA 41.51$289,313,000 A-2 AAA 22.50

$1,521,694,207 X-1** AAA

$43,200,000 X-2** NR

$34,238,000 B AA+ 20.25

$53,259,000 C AA 16.75

$38,042,000 D AA 14.25

$69,473,000 E AA 9.68

$23,691,000 F AA 8.13

$23,692,000 G A+ 6.57$23,692,000 H A 5.01

$23,259,000 J A 3.49

$6,827,000 K BBB+ 3.04

$18,643,000 L BBB 1.82

$27,745,000 M BBB

$7,000,000 N-MPA NR $11,000,000 N-LAF A

$3,500,000 N-W40 NR

$9,200,000 N-RQK BBB-

$2,000,000 N-SDF BB+

$8,000,000 O-LAF BBB

*Privately placed pursuant to Rule 144A. **Notionalamount and interest only. NR Not rated.

AnalystsEric Rothfeld+1 212 [email protected]

Daniel Chambers+1 212 [email protected]

The preliminary ratings do not reflect finalratings and are based on information provided byissuers as of July 13, 2006. These preliminaryratings are contingent on final documentsconforming to information already received.

Collateral may be added or dropped from theportfolio. Ratings are not a recommendation tobuy, sell, or hold any security. The prospectusand other offering material should be reviewedprior to any purchase.

See pages 624 for Collateral

Summary Review.

Presale ReportThe preliminary ratings listed at left reflect the credit enhancementprovided to each class by subordination of classes junior to it, thepositive and negative features of the underlying collateral, and theintegrity of the legal and financial structures, including advancing forliquidity by the master servicer and the trustee. The preliminary ratingsdo not address the likelihood or frequency of principal prepayments orthe receipt of prepayment premiums, default interest, additionalinterest, or penalties. The preliminary ratings on the interest-onlycertificates address only the likelihood of receiving interest paymentswhile principal on the related certificates remains outstanding. All

figures and percentages presented in this report are, in the case of loansthat have been split into an A/B note structure, based on the balancesof the A notes contributed to the pool and may not be reflective of thewhole loan amounts (the combined A and B note balances).

Strengths

All pooled whole loans or senior participations of whole loans inthe trust have credit characteristics consistent with investment-grade obligations.

Above-average Fitch stressed debt service coverage ratio (DSCR)of 1.54 times (x) and loan-to-value ratio (LTV) of 60.3%. Loanstotaling 88.4% of the pool by principal balance have a DSCRabove 1.50x.

High-quality and experienced sponsorship and/or propertymanagement. In many cases, sponsorship is institutional quality. Above-average collateral quality. Of the secured properties, 77.6% by

allocated loan balance received grades of B+ or better.

Strong structural features, including cash management, up-frontreserves, ongoing reserves, and, in some cases, debt service guarantees.

Transaction Highlights

Collateral: 14 floating-rate loans on 58 multifamily andcommercial properties

Fitch Stressed Debt Service Coverage Ratio: 1.54 times (x)

Issuer Debt Service Coverage Ratio: 2.28x*

Fitch Stressed Weighted Average Refinance Constant: 9.22%Fitch Loan-to-Value Ratio: 60.3%

Issuer Loan-to-Value Ratio: 42.7%

Loan Size Range: $16,500,000$575,000,000

Average Loan Size:$111,099,586

Financial Structure: Sequential pay

*Assumes London Interbank Offered Rate (LIBOR) of 5.35% for all loans except MagazineMultifamily Portfolio, MSPA Hotel Portfolio, Lafayette Estates, PHOV Portfolio II, andSheraton Delfina, for which the LIBOR cap was used. For ResortQuest Kauai, LIBOR of5.375% was used, and for the John Hancock Complex, the loans fixed swap rate was used.

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Concerns Of the pool, 97.4% has subordinate financing in

place in the form of junior participations of thefirst mortgage and/or mezzanine financing.

Loan concentration. The largest loan represents37.0% of the pool. The largest three loansrepresent 64.3% of the pool.

Nontraditional property types. One loan,representing 3.9% of the pool, is secured by aco-op conversion. One loan, representing 2.6%,is secured by undeveloped land parcels. Fiveloans, representing 19.8% of the pool, aresecured by hotels.

Mitigants

All junior participants and mezzanine lenders havesigned participation and/or intercreditor agreementsthat subordinate their rights to those of the seniorparticipants and the first mortgage lenders. Thepresence of additional debt is reflected in thecredit enhancement levels.

Overall, the 14-loan pool is secured by58 properties. The largest loan, MagazineMultifamily Portfolio, is secured by 37 differentproperties across five states. The second largestloan is secured by the John Hancock Complex,including some of the best performing officebuildings in the downtown Boston office market.The third largest loan, the MSPA HotelPortfolio, is secured by six hotels diversified byboth geography and brand.

The loan secured by a co-op conversion of theLafayette Estates is extremely low leveraged atapproximately $32,585 per unit. The loansecured by undeveloped land parcels andbenefits from strong and desirable locations. It isovercollateralized, as evidenced by purchase and

sale agreements and/or multiple purchase offersthat, in aggregate, equal almost three times theoutstanding principal balance of the loan. Two ofthe five hotel loans, totaling 68.3% of the hotelconcentration, are secured by multiple propertiesin geographically diversified locations. All hotelsare located or are in close proximity to majormetropolitan areas with stable economies.

Credit Issues

Transaction Structure

The trust assets are nine whole loans and five senior

participation interests in whole loans. Five of thewhole loans contain pooled and unpooled participationsinside the trust.

The transaction has a standard sequential-pay format.Prior to an event of default, principal and interestpayments are directed to the trust assets and subordinateinterests in the following order of priority: first, tointerest on the trust assets; second, to interest on the

Parties to Transaction

Lead Underwriter

Morgan Stanley & Co. Incorporated

Co-Managers

Bear, Stearns & Co. Inc. RBS Greenwich Capital

Master Servicer

Midland Loan Services, Inc. (rated CMS1by Fitch Ratings) (see Fitch Research datedOct. 5, 2005, available on Fitchs web site at

www.fitchratings.com)

Special Servicer

Midland Loan Services, Inc. (rated CSS1by Fitch) (see Fitch Research dated

Oct. 5, 2005, available on Fitchs web site atwww.fitchratings.com)

Trustee

Wells Fargo Bank, National Association

Depositor

Morgan Stanley Capital I Inc.

Seller

Morgan Stanley Mortgage Capital Inc.**For all loans, with the exception of the John Hancock Complex,which was co-originated by Lehman Brothers.

Loan Features

% of Pool

Escrow Requirements

Tax 81.5

Insurance 83.8Capital Expenditures 65.1

Leasing Costs*

Up-Front 56.0

Ongoing 34.3

Nonrecourse Carveouts**

Environmental 83.8

Fraud 83.8

*As a percentage of commercial properties. **Either to an individualor a well-capitalized entity.

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subordinate interests; and third, to principal pro rataon the trust assets and subordinate interests. Principalreceived on trust assets with pooled and nonpooledcomponents will be divided, pro rata, between the

pooled component and the nonpooled component.

Following an event of default, the subordinateinterests right to receive payments of principal andinterest will be subordinate to the trust assets right.Thus, following an event of default, principal andinterest payments will be directed to the trust assetsand subordinate interests in the following order ofpriority: first, to interest on the trust assets; second, toprincipal on the trust assets until paid in full; third, tointerest on the subordinate interests; and fourth, toprincipal on the subordinate interests. Consequently,to the extent that a trust asset with a subordinateinterest suffers any losses, the subordinate interest

will absorb those losses until fully extinguishedbefore any losses are directed to the trust. Losses thatrelate to trust assets with pooled and nonpooledcomponents will first be absorbed by the subordinateinterest until fully extinguished and then by thenonpooled component of the trust asset before anylosses are directed to the pooled securities.Furthermore, the subordinate interests (with theexception of rake classes) will not have the benefit ofbeing kept current through servicer advances.

Fitch Ratings Stressed DSCR and LTV

The following table summarizes the pools Fitch

stressed DSCRs and LTVs:

%

Fitch Stressed DSCRs

1.50x1.75x 88.4

1.35x1.49x 7.1

1.25x1.34x 4.5

Fitch Stressed LTVs

Less than 65% 66.3

65%73% 33.7

Loan Diversity

The following represents the pools loan concentrations:

Top three loan concentrations: 64.3%. Top 10 loan concentrations: 92.9%.

Sponsor Concentration

The following table represents the pools sponsorconcentrations greater than 5.0%:

%

Morgan Stanley Real Estate Fund 50.5Onex Real Estate Partners 37.0

Sawyer Realty Holdings 37.0

Beacon Capital Strategic Partners, LLC 16.4

Pyramid Advisors, LLC 13.5

Carlyle Realty Partners 12.8

In some cases, sponsors may have a limited interestin the borrowing entity.

Geographic Concentration

The following table shows the pools geographicconcentrations greater than 5.0%:

%Maryland 19.3

California 17.0

Massachusetts 16.4

Florida 10.1

Virginia 9.4

New York 7.0

Texas 5.7

Hawaii 5.3

Property Market Metric

The pools average Property Market Metric (PMM)score is 2.64, which is in line with other recent

floating-rate deals. The following table summarizesthe pools PMM scores:

%

PMM 1 19.2

PMM 2 26.2

PMM 3 35.9

PMM 4 9.3

PMM 5 9.4

PMM 6 0.0

Property Quality

Fitch inspected properties securing 13 of the 14 loansin the pool, including doing on-site property

management interviews for 84.5% of the pool. Fitchconsidered the overall collateral quality above average.The results of Fitchs site inspections are shown inthe following table:

%

B+ or Higher 77.6

B or B 20.0

C+ or Lower 2.4

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Subordinate and Other Additional Financing

The following represents a summary of loans in thepool with subordinate and other additional financing:

Five loans (57.6% of the pool) have juniorparticipation interests or junior notes held outsidethe trust.

Twelve loans (93.5% of the pool) have existingmezzanine debt that is secured by a pledge ofequity interest in the borrower.

The holders of the junior participation interests havethe following primary rights:

To appoint an operating adviser.

To appoint a special servicer, subject to ratingagency confirmation.

To cure monetary defaults through advances onthe senior participation.

To purchase the senior participation.

The holders of the mezzanine interests have thefollowing primary rights:

To approve the property operating budget. To terminate, under certain conditions, property

management.

To cure monetary defaults through advances onthe first mortgage.

To purchase the first mortgage loan.

The presence of additional financing is reflected inthe credit enhancement levels.

Loans with Interest-Only Periods

The following table summarizes the loans in the poolthat provide for payments of interest only for eitherthe entire loan term or a portion of the loan term:

%

Interest-Only Loans 90.5

Partial Interest-Only Loans

The credit enhancement levels reflect the additionalrisk posed by loans that provide for payments ofinterest only for either the entire loan term or a portionof the loan term.

Encumbered Interest

The following table summarizes the pool byencumbered interest:

%

Fee 92.9

Leasehold 7.1

All leasehold mortgage loans have lender-friendlyterms. The credit enhancement levels reflect theadditional risk posed by these leasehold mortgages.

Multiple Assets/Cross-CollateralizationLoans secured by multiple assets or loans that arecross-collateralized and cross-defaulted represent50.5% of the pool. These loans are considered tohave a lower loss severity.

Subordinate and Other Additional Financing

Property Name

SeniorInterest Trust

Balance ($000) % of Pool

Junior InterestNontrust Balance

($000)

MezzanineBalance

($000)Total Debt

($000)

Magazine Multifamily Portfolio 575.0 37.0 125.0 542.7 1,242.7

John Hancock Complex 255.0* 16.4 440.0 950.0MSPA Hotel Portfolio 170.0 10.9 37.1 71.7 278.8

One Wilshire 147.9 9.5 44.4 192.3

Lafayette Estates 61.0 3.9 9.0 70.0

Infomart 53.3 3.4 15.0 68.3

Market Post Tower 50.5 3.2 7.5 15.0 73.0

119 West 40th & 120 West 41st 48.5 3.1 38.2** 86.7

ResortQuest Kauai 43.2 2.8 31.2** 74.4

PHOV Portfolio II 40.0 2.6 8.7 27.4 76.0

Sheraton Delfina 30.0 1.9 30.0** 60.0

Holiday Inn-Columbus 24.5 1.6 10.5 35.0

Laurel Mall 16.5 1.1 9.3 25.8

Total 97.4

*50% pari passu participation of the whole loan. **Includes future upfundings. Note: Numbers may not add due to rounding.

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Terrorism Insurance

Currently, 100% of the pool has insurance policiesthat do not specifically exclude coverage for acts ofterrorism. Generally, such coverage is required, subjectto annual premium caps for stand-alone terrorismcoverage. However, there can be no guarantee thatterrorism insurance will be in place on an ongoing basis.

Third-Party Reports

Phase I environmental reports and property conditionreports prepared in the past 18 months were available

on greater than 99% of all properties by allocatedloan balance. The credit enhancement levels reflectthe environmental issues noted. Typically, up-frontreserves of 125% of the engineers recommendedamount were required for deferred maintenance issuesor the engineers cost estimate was immaterial.

Seismic studies were completed on six properties,representing 16.9% of the pool, that were in locationsdeemed to have seismic risk. No property has aprobable maximum loss in excess of 20%. Creditenhancement levels reflect the seismic risk of the pool.

SurveillanceFitch will review this transaction on an ongoingbasis, which includes a committee review at leastannually. Information can be found on Fitchs website at www.fitchratings.com.

Collateral Summary ReviewThe following pages, 624, provide a collateralsummary review of the top 10 loans.

Largest Loan Summary

Loan perProperty Property % of Sq. Ft./ DSCR (x) LTV (%)

Property Name Type State Quality Pool Unit ($) Issuer* Stressed** Issuer Stressed

Magazine Multifamily Portfolio Multifamily Var. B/B+ 37.0 44,508 2.50 1.59 37.4 55.9John Hancock Complex Office MA A 16.4 176 2.61 1.53 39.2 59.8MSPA Hotel Portfolio Hotel Var. B/B+ 10.9 65,731 1.73 1.54 42.0 70.1One Wilshire Office CA B+ 9.5 237 1.71 1.52 55.8 60.5Lafayette Estates Co-Op

Conversion NY 3.9 32,585 N.A. N.A. 59.8 65.7Infomart Office TX B+ 3.4 45 1.88 1.35 50.7 67.1Market Post Tower Office CA B 3.2 171 2.24 1.41 48.1 63.4119 West 40th & 120 West 41st Office NY B 3.1 154 1.16 1.30 44.1 68.4ResortQuest Kauai Hotel HI B+ 2.8 138,907 1.65 1.56 50.6 67.5Waikoloa Land Land HI B 2.6 2,899 N.A. N.A. 23.6 41.3PHOV Portfolio II Hotel Var. B+ 2.6 46,136 2.00 1.59 43.8 65.9

Top 11 Subtotal 95.4 2.22 1.54 42.6 60.3

*Assumes London Interbank Offered Rate (LIBOR) of 5.35% for all loans except Magazine Multifamily Portfolio, MSPA Hotel Portfolio, LafayetteEstates, PHOV Portfolio II, and Sheraton Delfina, for which the LIBOR cap was used. For ResortQuest Kauai, LIBOR of 5.375% was used, and forthe John Hancock Complex, the loans fixed swap was used. **Stressed debt service coverage ratio (DSCR): Average of Fitch constant DSCR andFitch term DSCR. Stressed loan-to-value ratio (LTV): Current loan balance/Fitch value. Based on pooled note. Sq. Ft. Square foot.Var. Various. N.A. Not applicable.

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Loan No. 1 Magazine Multifamily Portfolio

Fitch Credit Assessment(in the context of the pool):AA

Trust Debt SummaryTrust Amount: $575,000,000Maturity Date: 4/9/08Spread over LIBOR: 55 basis pointsTerm LIBOR Cap: 5.00%Extensions: Three one-year extensionsAmortization: Interest onlySponsors: Morgan Stanley Real Estate Fund, Onex

Real Estate Partners, and Sawyer RealtyHoldings

Purchase Price Date: $1.43 billion March 2006

Stressed

Debt StackAmt.

($ Mil.)Amt. per

Unit ($)DSCR

(x)LTV(%)

A Note 575.0 44,508 1.59 55.9Jr. Participation 125.0 54,184 1.31 68.0Mezzanine A 140.0 65,021 1.09 81.6Mezzanine B 115.0 73,922 0.96 92.8

Mezzanine C 120.1 83,219 0.85 104.5Mezzanine D 167.6 96,192 0.74 120.8

Total 1,242.7

LIBOR London Interbank Offered Rate. DSCR Debt service coverageratio. LTV Loan-to-value ratio.

Property SummaryProperty Type: Multifamily

Collateral: FeeTotal Units: 12,919Location: VariousYear Built/Renovated: VariousOccupancy: 90.4% (as of 4/30/06)

Structural Features SummaryLock Box: Soft.Ongoing Reserves: Monthly reserves in place for taxes,

insurance, and capital expenditures.Property Release: This first 45% of the loan may be released at

a price of 100% of the allocated debt.Additional assets may be released inconjunction with a 115% release premium.Additionally, the DSCR must be greater thanthe greater of the DSCR at closing orimmediately prior to any release.

Fitch Commentary

Strengths

Property diversity. The loan is secured by 37 class A and B multifamily properties totaling 12,919 units located across fivestates in the Mid-Atlantic and Southeast.

Well-capitalized sponsorship. Morgan Stanley Real Estate Fund currently has a portfolio of more than $13.5 billion in assetsunder management. It has raised more than $7 billion in equity over 196 transactions. Onex Real Estate Partners is asubsidiary of Onex Corporation, a Canadian company with a significant presence in the service, manufacturing, andtechnology sectors.

Experienced management. Sawyer Realty Holdings (Sawyer) has more than 15 years of experience in multifamilymanagement. Excluding the subject portfolio, Sawyer manages a portfolio of 76 multifamily properties across the easternand southern U.S.

Significant cash equity. Sponsorship has approximately $190 million in cash equity based on the entire debt stack relative tothe $1.43 billion purchase price.

Concern

The subject properties have generally underperformed primary market competition. As of April 30, 2006, the properties hadan average occupancy of 90.4%, with occupancies ranging from 70.3%100%. According to Cushman Wakefield, marketcompetitors have occupancies primarily falling between 95% and 97%.

Mitigant

Sawyer improved a 1,449-unit Town & Country Portfolio (the previous operator of this portfolio) to an 18% increase in totalrevenue and a 14% increase in average rents and reduced turnover to 35% from 50%. The sponsors strategy with thesubject portfolio following acquisition is improved performance through more efficient property management, including

raising units to market rents and reducing concessions. In addition, the sponsors will explore strategic asset sales todeleverage the loan.

Market Information

The properties are located in Maryland (49.3%), Virginia (25.5%), Florida (15.6%), Pennsylvania (7.9%), and Delaware(1.7%). The largest exposures fall in the metropolitan statistical areas of Baltimore and northern Virginia.

The Baltimore multifamily market contains approximately 129,700 apartment units within 503 complexes. The averagevacancy across the market was 4.5% as of year-end 2005, slightly lower than the level in each of the previous two years.New tenants are receiving minimal concessions, averaging only 0.41 months of free rents. In addition, rents increased anaverage 4.2% annually between 1995 and 2005.

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The suburban Virginia multifamily market contains approximately 141,486 units across 490 properties. The averagevacancy across the market was 4.1% as of year-end 2005, slightly lower than in each of the previous two years. Despitesignificant new construction over the past few years, vacancy has continued to decline due to a steady increase in demand.

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Loan No. 2 John Hancock Complex

Fitch Credit Assessment(in the context of the pool):BBB+

Trust Debt Summary (50% of A Note)Trust Amount: $255,000,000Maturity Date: 12/9/08Spread over LIBOR: 65 basis pointsSwap Rate: 4.89%Extensions: Four six-month optionsAmortization: Interest onlySponsor: Beacon Capital Strategic Partners II, L.P.Purchase Price Date: $935,000,000 March 2003

Stressed

Debt StackAmt.

($ Mil.)Amt.

psf ($)DSCR

(x)LTV(%)

A-1 Note* 255.0 176 1.53 59.8A-2 Note* 255.0 176 1.53 59.8Mezzanine A 265.0 267 1.01 90.9Mezzanine B 100.0 302 0.89 102.6Mezzanine C 75.0 327 0.82 111.4

Total 950.0

Property SummaryProperty Type: Three office buildings and 1,988-space

parking garageCollateral: Fee and leaseholdTotal sf: 2,902,104Location: Boston, MAYear Built/Renovated: 1923,1947,1973/1984,1994

*The A-1 and 1-2 notes are pari passu. The A-1 note will be securitizedin this transaction; the A-2 note is not included in this transaction.LIBOR London Interbank Offered Rate. psf Per square foot.DSCR Debt service coverage ratio. LTV Loan-to-value ratio.sf Square feet. NRA Net rentable area.

Tenant/Occupancy SummaryMajor Tenants: John Hancock Financial Services, Inc.

(38.5% of NRA); rated AA by Fitch RatingsInvestors Bank and Trust Co. (13.3% of NRA);rated A by FitchDeloitte & Touche (8.0% of NRA)Wachovia Corp. (6.3% of NRA); rated AAby Fitch

Occupancy: 98.6% leased (as of 3/31/06)

Structural Features SummaryLock Box: Hard.Ongoing Reserves: Springing reserves for taxes, insurance, and

capital expenditures.Up-Front Reserves: Reserves in place for unpaid leasing costs

in connection with the Wachovia lease($11.4 million) and rollover and future leasing($25 million).

Release Provisions: Properties may be released provided noevent of default has occurred and payment ofa release price of 100% of the allocated loan

balance is made.

Fitch Commentary

Strengths

High asset quality. The John Hancock Tower Complex consists of three trophy assets that have been well maintained andare 98.6% leased on a long-term basis. Nearly all the floors, including the lower-level floors, in the John Hancock Towerhave unobstructed city views.

Strong tenancy. Investment-grade tenants account for approximately 64% of the NRA. Leases accounting for 83.4% of theNRA expire beyond loan maturity.

Strong sponsorship. Beacon Capital Partners, LLC (Beacon) is a Boston-based real estate private equity investmentcompany with a current investment portfolio value of approximately $4.5 billion. It is a high-quality property owner,operator, and developer focusing on office properties in a select number of target markets, including Boston, Washington,D.C., New York, Los Angeles, San Francisco, Denver, Chicago, and Seattle.

Strong location. Bostons Back Bay is considered the citys most desirable submarket in terms of amenities and proximity tothe affluent western suburbs. The complex is in close proximity to some of Bostons best retail stores, restaurants, andluxury hotels. The properties are easily accessible by public transportation, including buses and trolley.

Concerns

The total debt on the property has a Fitch stressed debt service coverage ratio and stressed loan-to-value ratio of 0.82 timesand 111.9%, respectively. Based on the entire debt stack, the sponsor does not retain any equity in the property.

Mitigants

Since acquiring the asset in March 2003, Beacon has executed three major early lease renewals representing 23.5% of thetotal building square footage. In addition, four existing tenants have expanded at the properties, signing a total of61,121 square feet (sf), with an average total rent of $47.80 per square foot (psf) and average lease term of 8.5 years. Thiscompares to an in-place average rent of $39.80 psf.

The Back Bay submarket of Boston has displayed strong improvement in recent years. In the Back Bay, class A officemarket vacancy declined and asking rents increased from 10.4% and $34.70 psf, respectively, to 8.0% and $37.04 psf,

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respectively, from 20052006. In addition, the sponsors have been able to renew expiring leases at the subject buildings athigher rents.

Market Information

Overall vacancy in the Boston central business district office market improved from 14.6% in first-quarter 2005 to 12.9% in

first-quarter 2006. The direct weighted average rental rates increased from $29.96 psf to $31.69 psf over the same period. The property is located in the Back Bay submarket, which is the second largest in Boston and one of the strongest. The

overall submarket is showing an improvement in direct vacancy and direct weighted average rental rates, from 7.9% and$33.38 psf, respectively, in first-quarter 2005 to 6.5% and $35.39 psf, respectively, in first-quarter 2006.

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Loan No. 3 MSPA Hotel Portfolio

Fitch Credit Assessment(in the context of the pool):BBB

Trust Debt SummaryTrust Amount: $170,000,000Maturity Date: 12/9/07Spread over LIBOR: 149.9 basis pointsTerm LIBOR Cap: 5.00%Extensions: Three one-year extensionsAmortization: Interest onlySponsors: Morgan Stanley Real Estate Fund and

Pyramid Advisors, LLC

Stressed

Debt StackAmt.

($ Mil.)Amt. perRoom ($)

DSCR(x)

LTV(%)

Pooled A Note 170.0 65,731 1.54 70.1Jr. Participation 37.1 80,147 1.26 85.4Mezzanine A 43.8 97,103 1.04 103.5Mezzanine B 27.9 107,894 0.94 115.0

Total 278.8

Property SummaryProperty Type: HotelCollateral: FeeTotal Rooms: 2,584Location: VariousYear Built/Renovated: Various

LIBOR London Interbank Offered Rate. DSCR Debt service coverageratio. LTV Loan-to-value ratio. FF&E Furniture, fixtures, andequipment.

Structural Features SummaryLock Box: Hard.

Ongoing Reserves: Monthly reserves for taxes, insurance,and FF&E (1.0% of gross revenue for the first12 months, 2% for the next 12 months, 3%for the next 12 months, and 4% thereafter).

Up-Front Reserves: 125% of deferred maintenance andenvironmental remediation and anyoutstanding renovation work. There is a$14.4 million letter of credit (LOC) asadditional collateral for this loan. Of thisamount, $4.4 million may be deducted foroperating expenses or interest shortfalls. Anadditional $6.5 million LOC was postedfollowing the sale of the San Antonio CrownPlaza. All funds will be released when debtyield exceeds 8.0% for two consecutivecalendar quarters.

Release Provisions: During a cash trap period: the releasepayment must be the greater of 95% of saleor refinancing proceeds and 120% of the

allocated loan amount (125% for Daytonaand Columbia); DSCR following release(including cash and LOC reserves) must bethe greater of the DSCR at closing and theDSCR prior to release properties; and theLTV must be the lesser of the LTV at closingor the LTV prior to release. If a cash trap isnot in place, properties may be released bypaying 125% of the allocated loan amount forDaytona and Columbia and 115% for allothers.

Insurance: An all-risk policy is in place for 100% of thereplacement cost of the assets, inclusive ofany type of windstorm or hail damage.

Cash Trap: The lender shall trap excess cash flow afterpayment of all debt service if the DSCR isbelow 1.10x or the debt yield is below 8.0%.

Property Summary(As of April 30, 2006)

Property LocationYear Built/Renovated

Trust LoanAmount (%) Rooms

Occupancy(%) ADR ($)

RevPAR($)

Hilton-Daytona Daytona Beach, FL 1988/2005 39.7 742 46.4 146.71 68.03Marriott-Houston Houston, TX 1980/2004 20.9 600 70.5 107.62 75.85Hilton-Indianapolis Indianapolis, IN 1971/2004 13.7 332 69.9 126.13 88.20Marriott-Columbia Columbia, SC 1983/2004 10.0 300 70.1 114.12 80.02Hilton-Colorado Springs Colorado Springs, CO 1967/2004 9.9 292 72.7 114.87 83.45

Radisson-Northbrook Northbrook, IL 1969/2001 5.8 318 63.7 63.27 40.31Total 2,584 62.8 117.36 73.75

ADR Average daily rate. RevPAR Revenue per available room.

Fitch Commentary

Strengths The portfolio consists of six cross-collateralized/cross-defaulted hotels located in six geographically distinct markets. Experienced sponsorship. Morgan Stanley Real Estate Fund was founded in 1991 and currently has more than

$13.5 billion under management. Pyramid Advisors, LLC was formed in 1999 as a hotel development, management, andadvisory company for the hotel industry. The principals have 75 years of combined hospitality experience and activelymanage a portfolio of 49 hotels totaling 13,221 rooms.

Recent renovations averaging $27,012 per key ($69.8 million) and reflagging from Adams Mark hotels to Hiltons,Marriotts, and a Radisson have repositioned the assets within their competitive set, resulting in increased revenue peravailable room (RevPAR) penetration across the portfolio.

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Concerns

The largest hotel, Hilton-Daytona, is operating at 46.4% occupancy, far below its competitive set average of 68.1%. The Hilton-Daytona is highly susceptible to windstorm damage, as evidenced by the hurricane damage it suffered last year.

Since last year, the premium for windstorm insurance at the property has increased to $ 8 million from $250,000.

Highly leveraged in terms of the entire debt stack.

Mitigants

As a result of the hurricane damage, the Hilton-Dayton had 129,000 rooms off line in 2005. Rooms operating during thetrailing 12-month period averaged 66.6% occupancy. The hotel is now 100% reopened and fully operational for the firsttime as a renovated product with the Hilton flag. As one of the few upscale hotels in the market, Hilton-Daytonas averagedaily rate (ADR) penetration has been well above 100% historically. Both ADR and occupancy are expected to increasesignificantly due to the recent renovations and reflagging of the hotel.

The borrower has shown a commitment to the portfolio by paying the Hilton-Daytonas $8 million windstorm insurancepremium for the upcoming year. However, the premium is expected to be adjusted down significantly in the following yearto reflect a more commercially reasonable market level.

The largest hotel, Hilton-Daytona, has considerable cash flow upside upon the completion of a $19 million ($24,000 perroom) improvement plan and reflagging. Renovation work included upgrading of the restaurants, lobby, and pool patio,complete renovation of rooms in the South Tower (413 rooms), and furniture replacement in the North Tower (329 rooms).

Market Information

The Hilton-Daytona benefits from an excellent beachfront location, along with a convention center next door, which is in theprocess of expanding to 170,000 sf. As of the trailing 12 months ended April 30, 2006, the hotels penetration rates foroccupancy, ADR, and RevPAR were 68.1%, 117.5%, and 80.0%, respectively. As reflected in the ADR penetration rate of117.5%, the Hilton-Daytona is well positioned in the market as an upscale hotel with strong pricing power.

The Marriott-Houston was converted to the Marriott brand in May 2004, and renovation was completed in December 2004.The $18 million ($30,000 per room) budget was spent on renovating all 600 rooms, common areas, and meeting spaces. TheMarriott-Houston is located in the Westchase submarket of Houston, a suburban area west of downtown in which hoteldemand is generated increasingly by large corporate accounts. The hotels corporate accounts include National Oil,Halliburton, ATT, Exxon, and Shell. As of the trailing 12 months ended April 30, 2006, the hotels penetration rates foroccupancy, ADR, and RevPAR were 100.5%, 81.8%, and 82.2%, respectively.

The Hilton-Indianapolis was converted to the Hilton brand in August 2004, and the renovation was completed inSeptember 2005. The $7 million ($21,000 per room) budget was spent on renovating the lobby, front desk, and restaurant.As of the trailing 12 months ended April 30, 2006, the hotels penetration rates for occupancy, ADR, and RevPAR were100.0%, 92.3%, and 92.4%, respectively.

The Marriott-Columbia was converted to the Marriott brand in February 2005, and renovation of all 300 rooms, restaurants,meeting rooms, and pool patio, totaling $9 million ($30,000 per room), was completed in July 2005. Columbia is thecapital of South Carolina and is home to 11 colleges and universities, as well as a new convention center. As of the trailing12 months ended April 30, 2006, the hotels penetration rates for occupancy, ADR, and RevPAR were 113.8%, 117.9%, and134.2%, respectively.

The Hilton-Colorado Springs was converted to the Hilton brand in July 2004, and a $7 million renovation ($24,000 perroom) of all 292 rooms and the lobby was completed by September 2005. Recently, the Colorado Springs hotel markethas been buoyed by the increase in tourism and government activity at nearby bases As of the trailing 12 months endedApril 30, 2006, the hotels penetration rates for occupancy, ADR, and RevPAR were 122.7%, 118.1%, and 145.0%,respectively.

The Radisson-Northbrook was converted to the Radisson brand in September 2004, and the $3 million renovation ($9,400per room) was completed in September 2005. As part of the renovation program, the guestrooms, bathrooms, and hotelentrance were upgraded. The Northbrook market depends largely on corporate travel, and the Radisson has a number oflarge contracts with Allstate, HSBC, Walgreens, and Korea Air. A Westin and a Sheraton are expected to open in thenext two years but are expected to focus on a higher price point than the Radisson. As of the trailing 12 months ended

April 30, 2006, the Radissons penetration rates for occupancy, ADR, and RevPAR were 95.1%, 63.9%, and 60.7%,respectively.

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Loan No. 4 One Wilshire

Fitch Credit Assessment(in the context of the pool):BBB+

Trust Debt SummaryTrust Amount: $147,944,207Maturity Date: 9/9/08Spread over LIBOR: 164.5 basis pointsTerm LIBOR Cap: 5.75%Extensions: Two one-year extension optionsAmortization: 25-year scheduleSponsor: Carlyle Realty Partners

Stressed

Debt StackAmt.

($ Mil.)Amt.

psf ($)DSCR

(x)LTV(%)

A Note 147.9 237 1.52 60.5Mezzanine A 14.8 248 1.34 68.5Mezzanine B 29.6 293 1.14 81.0

Total 192.3 Property SummaryProperty Type: Office

Collateral: FeeTotal sf: 656,333Location: Los Angeles, CAYear Built/Renovated: 1966/1992

LIBOR London Interbank Offered Rate. psf Per square foot.DSCR Debt service coverage ratio. LTV Loan-to-value ratio.sf Square feet. NRA Net rentable area.

Tenant/Occupancy SummaryMajor Tenants: Musick Peeler, & Garrett (17.1% of NRA)

Verizon (MCI Telecom) (10.4%)Crowell, Weedon (7.3%)Occupancy: 98.8% (as of 4/30/06)

Structural Features SummaryLock Box: Hard.Ongoing Reserves: Monthly reserves for taxes, insurance, capital

expenditures, and leasing costs.Up-Front Reserves: An upfront reserve is in place at closing for

125% of all deferred maintenance andenvironmental remediation costs, asrecommended by the third-party engineer.

Fitch Commentary

Strengths

Strong sponsorship. Carlyle Realty Partners (CRP) is the real estate investing arm of the Carlyle Group, a global investmentfirm that originates, structures, and invests across various transaction types. CRP has acquired or developed more than3.3 million sf of telecom space and invested in 105 transaction from various property types.

Diverse tenancy. More than 200 colocation tenants account for approximately 35% of the total net rentable area (NRA). The

largest telecom tenant is Verizon, accounting for 10.4% of the NRA. The largest office/retail tenants, Musick Peeler, &Garrett and Crowell, Weedon, account for 17.1% and 7.3% of the NRA, respectively. No other single office or retail tenantaccounts for more than 4% of the NRA.

Asset quality. The subject is one of the premier telecommunication and data centers in the world, only comparable to60 Hudson Street in New York City and Telehouse in London as far as connection to the global communications network.

Concerns

Lease rollover. Tenants accounting for 36.5% of the NRA have leases expiring during the loan term. Telecom tenants are paying higher rents than office tenants at other downtown Los Angeles office buildings.

Mitigants

The asset is occupied by a diverse collection of tenants. Of the expiring leases, only Verizon (MCI Telecom) represents alarge concentration of space (10.4% of NRA), and this tenant is subject to multiple leases with various expirations between2006 and 2009. In addition, One Wilshire is one of the leading communication centers in the world and serves as theprimary switching and interconnectivity point in the western U.S. Carlyle has executed 41 telecom leases at an average rate

of $35.90 psf since acquiring the building in 2001. The subject is not comparable to traditional office buildings in Los Angeles because its presence in the telecommunications

sector is unmatched on the West Coast. Traditional office tenants at the subject are paying below-market rents. Recenttelecom tenants at the subject have signed leases averaging $36.99 psf, indicating the premium associated with desirabletelecom space.

Market Information

The subject is located in downtown Los Angeles at the intersection of Grand Avenue and Wilshire Boulevard. The subject isa unique asset within the Los Angeles office market because of its status as the primary colocation space provider,switching, and interconnectivity point on the West Coast of the U.S. Other major data centers in the U.S. include 60 HudsonStreet and 111 Eighth Avenue in New York City. The downtown class A office market as a whole reported average asking

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rents of $21.78 psf and vacancy of 14.5% according to Torto Wheaton Research as of first-quarter 2006, well below thelevel of recent leases signed at the subject, averaging $36.99 psf and with occupancy of 98.8%. However, because thesubject is the primary telecom center on the West Coast, it has steadily outperformed the overall office market.

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Fitch Commentary

Strengths

Experienced sponsorship. Apollo Real Estate Advisors (Apollo) is one of the most active and prominent opportunistic real

estate investors in the U.S. and internationally. Since the companys founding in 1993, Apollo has overseen the investmentof 10 real estate funds totaling more than $5.2 billion in equity. Ramius Capital is an investment management company with$7.4 billion of assets under management.

Location. The properties are located southeast of the intersection of the Bruckner Expressway and the Bronx River Parkwayand border Soundview Recreational Park, a 158-acre public park located along the Bronx River. Many of the units haveterraces with views of the Long Island Sound and the Manhattan skyline. In addition, because the properties are naturallybordered on all sides by the expressway, the East River, and the Soundview Recreational Park, the immediate neighborhoodhas less crime problems than other Bronx neighborhoods.

Cash equity of $25 million based on the August 2005 acquisition price, representing approximately 26.3% of the purchaseprice. In addition, the A note represents a low trust amount per unit of $32,708, and the total debt represents $37,534 per unit.

Concerns

The plans for the co-op conversion have not yet been approved. The B note is paid down pro rata with the trust A note while current.

Mitigants The plans for the co-op conversion provide a unique opportunity for local residents to purchase partially subsidized low-

income housing. The response from the current rental tenants to the conversion has been very positive, with more than 70%of all tenants indicating interest in buying their units.

Fitchs stressed net sellout value (NSV) of $92.8 million represents $64 psf relative to the A note balance of $48 psf. Basedon Fitchs NSV, the sale of 58.8% of the units at $102 psf or all units at $55 psf would fully repay the A note and pro ratasubordinate debt. In an event of default, proceeds are applied sequentially throughout the capital stack, with the A notereceiving all principal until repaid.

Loan No. 5 Lafayette Estates


Trust Debt SummaryTrust Amount: $61,000,000Maturity Date: 1/9/08Spread over LIBOR: 133 basis pointsTerm LIBOR Cap: 5.00%Extensions: Six six-month extension optionsAmortization: Interest onlySponsors: Apollo Real Estate Advisors and

Ramius CapitalPurchase Price Date: $95.0 million August 2005

Stressed

Debt StackAmt.

($ Mil.)Amt. psf/

Unit ($)DSCR

(x)LTV(%)

A Note 61.0 32,585 N.A. 65.7Jr. Participation 9.0 37,393 N.A. 75.4

Total 70.0

Property SummaryPre-ConversionProperty Type: MultifamilyPost-ConversionProperty Type: Co-opCollateral: FeeTotal Units: 1,872Location: Bronx, NYYears Built: 1962 and 1969

LIBOR London Interbank Offered Rate. psf Per square foot.DSCR Debt service coverage ratio. LTV Loan-to-value ratio.N.A. Not available.

Structural Features SummaryLock Box: Soft.

Ongoing Reserves: Monthly for taxes and insurance. $250 perunsold unit per year for replacementreserves.

Up-Front Reserves: Conversion reserve of $5.3 million andinterest reserve of $1.4 million.

Guaranty: None.Principal Paydown: Minimum of 92% of gross sales proceeds,

with no proceeds released to the borroweruntil the full repayment of the debt, or if theDSCR is greater than 1.20x, the borrowerreceives any sales proceeds in excess of125% of the allocated loan amount.

Future Funding: None.

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Market Information

The property is located within the Soundview section of the Bronx. Soundview is generally bordered by the Cross-BronxExpressway to the north, White Plains Road to the east, the Bronx River to the west, and the East River to the south. The2004 population within a one-mile radius of the property is estimated at 109,973 and is expected to increase nominally overthe next five years to a projected level of 112,633.

The property is located in an established neighborhood that has remained relatively stable. The forecast for the area is forgeneral stability in population growth, with improved conditions for certain area housing developments. The crime rate inthe area has trended downwards, which continues to have a positive impact on communities such as Soundview.

Other Information

The properties were developed under the Mitchell Lama program, a New York State program that provides affordablehousing to moderate- and middle-income families. The sponsors have the right to exit the Mitchell Lama program and filedtheir notice of intent with the Department of Housing and Community Renewal. The exit from the Mitchell Lama program isexpected to occur at the beginning of 2007, at which point the units will be converted to co-ops.

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Loan No. 6 Infomart


Trust Debt SummaryTrust Amount: $53,250,000Maturity Date: 5/9/09Spread over LIBOR: 183 basis pointsTerm LIBOR Cap: 6.50%Extensions: Two one-year optionsAmortization: Interest onlySponsors: ASB Capital Management Inc.

DCI Technology HoldingsPurchase Price Date: $105 million April 2006

Stressed

Debt StackAmt.

($ Mil.)Amt.

psf ($)DSCR

(x)LTV(%)

A Note 53.3 45 1.35 67.1Mezzanine 15.0 57 1.05 86.1

Total 68.3 Property Summary

Property Type: OfficeCollateral: FeeTotal sf: 1,195,558Location: Dallas, TXYear Built/Renovated: 1985/1999

LIBOR London Interbank Offered Rate. psf Per square foot.DSCR Debt service coverage ratio. LTV Loan-to-value ratio.sf Square feet. NRA Net rentable area.

Tenant/Occupancy SummaryMajor Tenants: Patriot American Hospitality (12.8% of NRA)

MCI WorldCom Communications(10.1% of NRA)Verio (5.6% of NRA)

Occupancy: 73% (as of 2/6/06)

Structural Features SummaryLock Box: Hard.Ongoing Reserves: Monthly reserves in place for taxes,

insurance, capital expenditures, and leasingcosts ($225,000 per month capped at$5,000,000 in aggregate).

Up-Front Reserves: Upfront reserves in place for taxes($756,168), insurance ($69,921), and capitalexpenditures (125% of engineersrecommended costs).

Fitch Commentary

Strengths

Experienced sponsorship and management. ASB Capital Management Inc. (ASB), a subsidiary of Chevy Chase Bank, has$8 billion of assets under management, including a real estate portfolio of 74 properties across 25 markets. ASB has ownedand/or operated more than 700,000 sf of assets in the telecommunications sectors. DCI Technology Holdings (DCI), a realestate equity and management company, currently owns or operates six data centers in the U.S. for such clients as Ebay,Global Crossing, and Qwest.

Asset quality. Infomart is a seven-story class A office and telecommunications center. Primarily due to its fiber access,power capacity, and energy power backup, Infomart has served as one of the primary data centers in Dallas and thesoutheast region of the U.S.

Tenant diversity. The subject consists of 640,000 sf of telecommunication space, in addition to 550,000 sf of traditionaloffice space. The telecommunication space is occupied by 42 tenants, none occupying greater than 5.6% of the buildingsNRA. Two office tenants, Patriot American Hospitality and MCI WorldCom Communications, occupying 12.8% and 10.1%of the NRA, respectively, are the sole office tenants occupying greater than 3.2% of the NRA.

ASB and DCI have $36.75 million in cash equity in the deal based on the entire debt stack and acquisition price.

Concerns

A loan secured by the subject property included in the GMAC 2002-FL1 transaction incurred a maturity default following adecline in occupancy due to stress in the telecommunications sector.

Rollover risk. The two largest office tenants, Patriot American Hospitality and MCI WorldCom Communications, have

leases expiring in 2007.

Mitigants

The previous loan was purchased out of bankruptcy for $105 million and refinanced, allowing full recovery for the previoussecuritized loan. The current debt stack of $68.25 million is lower leveraged than the $115 million of previous financing,with far greater equity held by the sponsors.

An ongoing reserve is in place for leasing costs, accruing to a maximum of $5 million. Leasing activity at the subject hasbeen strong, with more than 100,000 sf of new leases signed in 2005 at rents in line with the market and an additional50,000 sf of new leases signed since the owner took possession of the subject in April 2006. In addition, thetelecommunication portion of the building is likely to sustain or exceed its current occupancy because those tenants tend notto relocate because of high relocation costs and substantial equity investments.

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Market Information

Infomart is located on Stemmons Freeway, the most heavily trafficked route through downtown Dallas. The location is onthe border of the Turtle Creek/Uptown submarket, the strongest office submarket in Dallas.

According to Torto Wheaton Research, as of first-quarter 2006, the Stemmons Freeway submarket had a direct vacancy rateof 34.1% across all office classes and a class A asking rent of $17.08 psf. Turtle Creek/Uptown, one of Dallas strongestsubmarkets, had direct vacancy of 10.8% across all classes (10.5% for class A space) and class A asking rent of $23.49 psf.In comparison, traditional office tenants at the subject pay an average rent of $18.29 psf. Low-capacity telecom tenants payan average of $22.14 psf, while high-capacity telecom tenants pay an average of $28.71 psf.

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Loan No. 8 119 West 40th & 120 West 41st

Fitch Credit Assessment(in the context of the pool)*: BBB

Trust Debt SummaryTrust Amount: $48,500,000Maturity Date: 3/9/11Spread over LIBOR: 94 basis pointsTerm LIBOR Cap: 6.00%Extensions: NoneAmortization: Interest onlySponsors: AEW Partners V, LP and Colliers ABR, Inc.Purchase Price Date: $105 million 2006

Stressed

Debt StackAmt.

($ Mil.)Amt.

psf ($)DSCR

(x)LTV(%)

Pooled A Note 45.0 134 1.30 68.4Nonpooled A Note 3.5 154 1.21 73.7Mezzanine A** 28.3 230 0.75 116.7Mezzanine B** 9.9 259 0.67 131.8

Total 86.7

*Only the pooled trust amount of $45 million is rated BBB byFitch Ratings. **Assumes future funding obligation is fully drawn.LIBOR London Interbank Offered Rate. psf Per square foot.DSCR Debt service coverage ratio. LTV Loan-to-value ratio.

Property SummaryProperty Type: Office

Total Properties: TwoCollateral: Fee

Structural Features SummaryLock Box: Hard.Ongoing Reserves: Monthly reserves in place for taxes,

insurance, capital expenditures, and leasingcosts.

Future FundingObligation: $8 million of future funding obligations may

be drawn on a monthly basis for usageallocated among interest shortfalls($3 million), lease-up costs ($4 million), andincurred approved capital expenditures($1 million). The upfundings will be allocatedamong the mezzanine pieces.

Insurance: An all-risk insurance policy is in place for100% of the full replacement cost of theassets. If terrorism insurance is excluded

from the all-risk policy, a separate policy isrequired, subject to a premium cap of$150,000.

Property Summary

Property LocationYearBuilt

Trust LoanAmount

(%)Size

(000 sf)Occupancy

(%) Largest Tenant(s)NRA of Largest

Tenant(s) (%)

119 W. 40th New York, NY 1915 82.0 315.0 88.3

Century Business Credit(a subsidiary of Wells FargoBank) 24.6

120 W. 41st New York, NY 1914 18.0 19.6 19.9 Simply Pasta 19.9Total/Weighted Average 100.0 334.6

sf Square feet. NRA Net rentable area.

Fitch Commentary

Strengths

Below-market rents. The average in-place rents at 119 West 40th Street are $23.77 psf, well below the submarket rents of$37 psf per the appraiser and $38.62 psf for class B office space in the Times Square/Theatre district submarket as of first-quarter 2006, according to Torto Wheaton Research.

Low loan psf of $134.52 based on the trust amount. Strong midtown location. The subject buildings are located on 40th and 41st Streets along Sixth Avenue in close proximity

to Bryant Park, Times Square, and Grand Central Station.

Well-capitalized sponsorship. AEW Partners V, LP is a real estate investment and advisory company with more than$20 billion in assets under management. Colliers ABR, Inc. is a full-service commercial real estate company withapproximately 14 million sf of office space under management in the New York City area.

Development potential. 120 West 41st Street is zoned for 12 floors of office or hotel development or 10 floors of residentialdevelopment in a desirable midtown location. The building currently is on 19,600 sf, consisting of one floor of ground-level

retail and four floors of vacant office space.

Concerns

Expiring leases. 119 West 40th Street has leases totaling 93,000 sf (29.5% of NRA) expiring by August 2007. The building at 120 West 41st Street is almost entirely vacant.

Mitigants

Rents at the 40th Street building average $23.77 psf, well below current market rents. Upon lease expiration, managementexpects to sign new leases at market rents. The future funding obligation allocates $4 million toward lease-up costs.

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Zoning for the 41st Street building permits redevelopment that would allow the existing building to be significantlyexpanded. Rather than leasing the vacant space, the sponsor is expected to redevelop the property or sell it to a developer.

Market Information

The subject buildings are located in the Times Square submarket of Manhattan. The two buildings, located between Sixth

and Seventh Avenues on 40th and 41st Streets, respectively, are each located in close proximity to Times Square, BryantPark, and Grand Central Station, in addition to numerous bus and subway lines. According to Torto Wheaton Research, asof the first-quarter 2006, the Times Square submarket had average gross asking rents of $38.62 psf and average vacancy of8.6%. This central Manhattan location makes the subject buildings valuable assets operating in the office, residential, orlodging sectors.

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Loan No. 9 ResortQuest Kauai


Trust Debt SummaryTrust Amount: $43,200,000Maturity Date: 7/9/09Spread over LIBOR: 90.5 basis pointsTerm LIBOR Cap: 6.00%Extensions: Two one-year optionsAmortization: Interest onlySponsors: RREEF (80.1%) and Gaylord Entertainment

Company (19.9%)Purchase Price Date: $85.4 June 2006

Stressed

Debt StackAmt.

($ Mil.)Amt. perRoom ($)

DSCR(x)

LTV(%)

A Note 43.2 138,907 1.56 67.5Mezzanine A* 15.6 189,550 1.14 92.0Mezzanine B* 15.6 240,193 0.90 116.6

Total 74.4

Property SummaryProperty Type: HotelCollateral: FeeTotal Rooms: 311Location: Kauai, HIYear Built/Renovated: 1977/2006

*Includes future upfundings. **The hotel was undergoing an extensiverenovation from 20032005. LIBOR London Interbank Offered Rate.DSCR Debt service coverage ratio. LTV Loan-to-value ratio.TTM Trailing 12 months. ADR Average daily rate.RevPAR Revenue per available room.

Occupancy/Revenue SummaryAs of Date: 12/31/05

TTM Occupancy: 45.1%TTM ADR: $103.50TTM RevPAR**: $46.64

Historical RevPAR Summary2004 RevPAR**: $14.442003 RevPAR**: $30.90

Structural Features SummaryLock Box: Hard.Ongoing Reserves: Monthly reserve in place for taxes and

insurance.Up-Front Reserves: $2 million reserve in place for capital

expenditures and $1 million for debt servicepayments.

Fitch Commentary

Strengths

Strong market fundamentals. Kauai hotels have maintained strong performance historically, partially attributable to limited

supply, as the island is less developed than the other main Hawaii islands. Large portions of the island are undeveloped,preserved as rain forest and deep valleys. Total visitation to Hawaii in 2005 was greater than 7.0 million visitors, accordingto the State of Hawaii, a historical high. The percentage of domestic tourists has been steadily increasing.

Significant capital expenditures. The property underwent a $20 million renovation between October 2003 andNovember 2005, when the hotel was rebranded a Courtyard by Marriott. The borrower rebranded the hotel as a ResortQuestin conjunction with an additional $10 million renovation that will include $6 million allocated to landscaping and the hotelpool.

Well-capitalized sponsorship. RREEF, a subsidiary of Deutsche Asset Management, is a family of real estate and equityfunds. Currently, RREEF has approximately $68 billion of assets under management. Gaylord Entertainment Companyoperates the Resort Quest platform, which focuses on hospitality and vacation rental property management. ResortQuestcurrently operates 17,000 units across hotels, private homes, villas, and condos located nationwide. Included in this portfolioare 5,000 rooms across 28 hotels and condominium resorts in Hawaii.

Concerns

The hotel has not reached the stabilized performance that is forecast for an asset of the quality and location of the subject.

RevPAR ranged from $30.90$46.64 from 20032005, during which the hotel was under extensive renovation. The Hawaii hotel market is highly susceptible to political and economic factors, both domestically and internationally.

Evidence includes poor performance after the events of Sept. 11, 2001, from a slowdown in tourist travel from Asia as aresult of SARS, and the impact of the Iraqi War.

Mitigants

The subject underwent a $20 million renovation ($64,309 per key) from 20032005. Sponsorship has shown a strongcommitment to renovating the subject (an additional $32,154 per key) to offer a superior product in a desirable market.

Hawaii has a diverse tourism draw. Having relied on international visitors historically, Hawaii has experienced a significantincrease in domestic tourism, creating a better balance of customers in the lodging and tourism industries.

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Market Information

The subject is located in the city of Kapa along the east coast of Kauai. Kauai is the most northern of Hawaiis mainislands, and at 550 square miles, it is Hawaiis fourth largest island. However, of the main islands, Kauai is the leastdeveloped, as large portions of the islands have been preserved as rain forest and deep valleys. The east coast of the islandhouses Kauais airport, located six miles from the subject, and many of the midlevel hotels by price point. Tourism to Kauai

has increased at an average annual rate of 2.8% since 1995, according to the Hawaii State Department of Business. Hawaiitourism has experienced improved performance as domestic travel has increased steadily in the past 10 years, boosted by anincreased number of flights added from East Coast cities.

Other Information

The property is initially being acquired as a leasehold interest, a common structure in Hawaii real estate. However, theborrower has exercised the right to purchase the land for $8.4 million. The lender is financing 80% of the acquisition priceof the ground and will place this money in escrow until the conclusion of a 120-day period following delivery of notice ofintent. If, for any reason, the fee acquisition does not close, these funds will be used to pay down the principal balance, witha $3 million allocation to the A note. A comparison of this prepayment with the addition of a ground rent payment wouldresult in a lower leveraged mortgaged loan than the current analysis, assuming the option is exercised.

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Loan No. 10 Waikoloa Land

Fitch Credit Assessment(in the context of the pool):AA

Trust Debt SummaryTrust Amount: $40,000,000Maturity Date: 1/9/08Spread over LIBOR: 425 basis pointsTerm LIBOR Cap: 5.50%Extensions: One six-month optionAmortization: Interest onlySponsor: Vitoil CorporationPurchase Price Date: $60 million September 2005

Stressed

DebtAmt.

($ Mil.)Amt. perAcre ($)

DSCR(x)

LTV(%)

A Note (Whole Loan) 40.0 2,889 N.A. 41.3

LIBOR London Interbank Offered Rate. psf Per square foot.DSCR Debt service coverage ratio. LTV Loan-to-value ratio.N.A. Not available.

Property SummaryProperty Type: Land

Total Tax Parcels: 22

Structural Features SummaryLock Box: Hard.Ongoing Reserves: Monthly reserves in place for taxes and

insurance.Up-Front Reserves: A debt service reserve ($5.93 million),

approved development costs ($4 million),taxes ($545,367), and insurance ($12,113)are in place at closing.

Release: The release of individual parcels is permittedsubject to prepayments of the greater of 80%of the net sales proceeds or 70% of the grosssales proceeds. The minimum release priceby parcel is as listed in the table below.

Property Summary

Type of Parcel Location Size (Acres)Trust Loan

Amount (%)

EntitledResidential

UnitsDevelopmentHorizon

MinimumRelease

Price ($ Mil.)

Highlands Hawaii 4,210 20.16 677 Medium Term 21

Commercial Hawaii 45 21.00 N.A. Short Term 20Queen K Highway Hawaii 3,784 19.65 643 Long Term 20Ranchlands Hawaii 5,184 18.90 220 Medium Term 20Multifamily Residential Hawaii 42 15.56 1,014 Short Term 20

Golf Estates Hawaii 533 4.72 453 Short Term 27Total/Weighted Average 13,797 100.00 3,008

N.A. Not applicable. Note: Numbers may not add due to rounding.

Fitch Commentary

Strengths

Structure of the transaction. The loan is fully recourse to a sponsor with significant net worth. All parcels are zoned forvarious uses, including commercial and residential use. The 45-acre commercial parcel and 42-acre multifamily residentialparcel are zoned for their ultimate use and can be developed imminently. In addition, a reserve is in place for the entireoutstanding debt service over the initial term.

Purchase and sale agreements are in place for the commercial and residential parcels for $31 million and $26.3 million,respectively, contingent on the completion of due diligence by the involved parties. In addition, the purchase and saleagreement is in place for the golf estates for $55 million, contingent on a land designation change from urban to rural toallow for higher density development. The release prices of the 45-acre commercial parcel and 42-acre multifamilyresidential parcel total $40 million, equal to 100% of the loans outstanding principal balance.

Strong location. The parcels of land are located in the South Kohala district of The Big Island. South Kohala is known for itsworld-class resort communities, such as Mauna Kea Resort, Mauna Kani Resort, and the Waikoloa Beach Resort. Inaddition to tourism, the district has experienced significant population growth and reduced unemployment in recent years.

Concerns

The loan is secured entirely by undeveloped land. This is significantly more volatile than traditional commercial real estatebecause development is highly susceptible to changing economic conditions, construction costs, and stateregulations/ordinances.

The Ranchlands parcel, totaling 5,184 acres, has no water source. Due to a deed restriction, the sponsor is prohibited fromdrilling on the collateral.

The Queen K Highway parcel, accounting for 3,784 acres, is a long-term project, with a development or sale horizon ofgreater than five years.

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Mitigants

Three purchase and sale agreements are in place for $112.3 million. Two agreements totaling $57.3 million are from parcelsthat are fully entitled and zoned and conditioned only on final due diligence. The loans total collateral is equal to $2,899 peracre, well below sales comparables for the various land uses.

In regards to the Ranchlands, the sponsor is currently exploring alternative water sources, such as the adjacent Parker Ranch.The sponsor estimates the cost of the water source from $2 million$5 million. Purchase offers between $29 million$35million have already been received by the sponsor for the Ranchlands parcel.

The Queen K Highway is the largest developable parcel of land along the primary access route to Waimea and Kona. Assuch, the parcel has the potential to be developed into a large master-planned community, including residential, commercial,hotel, and civic space.

Market Information

The property is located in Waikoloa Village of the South Kohala district on the island of Hawaii. The island of Hawaii, alsoknown as the Big Island, is more than 4,000 square miles and twice the size of any of the other islands of Hawaii. Tourism isthe dominant industry of Hawaii, which had approximately 7.0 million visitors in 2004. The South Kohala district of the BigIsland has several world-class resort communities. While tourism continues to drive the economy, the area is also wellknown for ranching and agriculture. Waikoloa Village has experienced steady population growth recently, averaging 7.87%annually between 2000 and 2005. Hawaii Information Service reports that sales of residential, condominium, and vacantland have increased by between 34% and 51% over the past year.

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Morgan Stanley Capital I Inc Series 2006 XLF

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