[0] SFSC Grantor Trust 1997-1, Upgraded by Fitch.

Business Editors

NEW YORK--(BUSINESS WIRE)--May 16, 2001

SFSC Grantor Trust 1997-1, grantor trust pass-through certificates are upgraded by Fitch as follows: $48 million class A-1 to 'AA+' from 'AA' and $5.3 million class A-2 to 'A+' from 'A'. The rating actions follow Fitch's annual review of the transaction, which closed in December 1997.

The trust is collateralized by the borrower's leasehold interest in The San Francisco Shopping Centre (SFSC). SFSC, located in the Union Square area of San Francisco, is an enclosed, eight-level regional mall, anchored by a 312,000 square foot (sf) Nordstrom. The center also contains approximately 200,000 sf of non-anchor gross leasable area, and includes such national tenants as Abercrombie and Fitch, Bebe, J. Crew, Ann Taylor and Kenneth Cole.

The upgrades reflect a significant improvement in SFSC's operating performance during 2000, compared to 1997. The average in-line store sales increased to $571/sf from $524/sf and the average in-place rent increased to $62.80 from $58.57. In-line occupancy is 92%, compared to 88% at closing. Fitch's 2000 overall debt service coverage ratio (DSCR) was 1.89 times (x), compared to 1.53x at closing, and is up from 1.67x at year-end 1999. The DSCRs were calculated using Fitch's stressed net cash flow (the borrower's reported net operating income less adjustments for management fee, tenant improvements, leasing costs, and capital reserves) and an assumed hypothetical refinance rate of 9.0%. The Fitch loan-to-value (LTV) ratio, based on Fitch's 2000 stressed net cash flow and an 8.5% capitalization rate, is 61%, compared to 76% at closing.

Management's strategy to re-merchandise/re-tenant the mall has enabled the center to expand the space for stronger tenants and lease-up previously vacant or un-leasable space, enhancing the center's competitive position in the market. The re-merchandising, which took several years, was completed in 2000.

The loan maturity date has been extended from 2001 to 2005, after the borrower had exercised four one-year extension options.

The ground rent arbitration proceedings to determine the proper level of ground rent have been ongoing since 1995. The borrower is currently paying annual ground rent of $2.25 million.

Until 2000, SFSC was indirectly owned by Urban Shopping Centers, Inc. (USC), a self-administered REIT, and Hacket and Meade, each 50% owners. In 2000, USC was acquired by Rodamco North America NV, a leading Dutch-based U.S. regional mall property company.

Fitch will continue to monitor the property's performance, as surveillance is ongoing.