Fitch Downgrades 1 Class of BSCMSI 2004-PWR5; Assigns Outlooks.

NEW YORK -- Fitch Ratings downgrades Bear Stearns Commercial Mortgage Securities Inc. (BSCMSI) commercial mortgage pass-through certificates, series 2004-PWR5, and assigns Rating Outlooks as follows:

--$3.1 million class P to 'CCC/RR1' from 'B-'.

In addition, Fitch affirms and assigns Rating Outlooks to the following classes:

--$151.6 million class A-2 at 'AAA'; Outlook Stable;

--$134 million class A-3 at 'AAA'; Outlook Stable;

--$100 million class A-4 at 'AAA'; Outlook Stable;

--$579.1 million class A-5 at 'AAA'; Outlook Stable;

--Interest-only class X-1 at 'AAA'; Outlook Stable;

--Interest-only class X-2 at 'AAA'; Outlook Stable;

--$29.3 million class B at 'AA+'; Outlook Stable;

--$9.3 million class C at 'AA'; Outlook Stable;

--$20 million class D at 'A+'; Outlook Stable;

--$13 million class E at 'A'; Outlook Stable;

--$15.4 million class F at 'BBB+'; Outlook Stable;

--$9.3 million class G at 'BBB'; Outlook Stable;

--$18.5 million class H at 'BBB-'; Outlook Stable;

--$4.6 million class J at 'BB+'; Outlook Negative;

--$4.6 million class K at 'BB'; Outlook Negative;

--$6.2 million class L at 'BB-'; Outlook Negative;

--$4.6 million class M at 'B+'; Outlook Negative;

--$4.6 million class N at 'B'; Outlook Negative.

Class A-1 has paid in full. Fitch does not rate the $13.9 million class Q certificates.

The downgrade reflects the transfer of two loans to special servicing since Fitch's last rating action. There are now a total of three assets (1%) in special servicing. All three assets are retail properties, one is real estate owned (REO) and two are delinquent. Fitch is expecting losses on all three specially serviced assets.

The largest specially serviced loan (0.57%) is secured by a 51,000 square foot (sf) retail center located in Garden City, NY. The loan transferred to the special servicer due to imminent default. The center lost a second major tenant in December 2008 which reduced the occupancy to 26%. The other specially serviced assets are retail centers which have also experienced performance problems after major tenants vacated and the borrower was unable to release the space. Both centers are approximately 40% occupied.

As of the April distribution date, the pool has paid down 10.7% to $1.1 billion from $1.23 billion at issuance and 10 loans (18.3%) have been defeased.

Fitch reviewed the performance of the six remaining shadow ratings: Reisterstown Plaza (4.3%), Fullerton Metrocenter (2.4%), New Castle Marketplace (1.2%) and New Hampshire Tower (0.9%) all retain their investment-grade shadow ratings based on their stable performance. World Apparel Center (3.2%) and Palmetto Business Park (1.2%) have both seen declines in performance due to declines in occupancy. These two loans are no longer considered investment grade. Monticello Mall has paid in full.

Reisterstown Plaza is a 791,661 sf mixed-use property consisting of retail and office space in Baltimore, MD. Anchor tenants include Home Depot and Burlington Coat Factory. The sponsor is Inland Western Retail Real Estate Trust (IWRRETI), a subsidiary of Inland Group, Inc. Occupancy as of year-end (YE) 2008 was 94% compared to 97.1% at issuance. While the loan continues to perform well, Fitch remains concerned about the borrower's ability to refinance in the current lending environment when the loan matures in September 2009.

World Apparel Center is a 1.2 million sf office property located in Midtown Manhattan. Major tenants include Jones Apparel Group, Chase Manhattan and Levi Strauss. The property benefits from the experienced sponsorship of Trizec Properties, Inc., a publicly traded real estate investment trust (REIT). Occupancy as of YE 2008 had declined to 80.6% compared to 97.9% at issuance.

The top 10 non-defeased loans represent 30.1% of the pool. The loans have generally experienced stable performance since issuance. None of the loans have reported debt service coverage ratios below 1.47 times (x). The largest loan in the pool is 2941 Fairview Park Drive which is collateralized by a 353,000 sf office building in Falls Church, VA. The servicer reported occupancy and DSCR as of June 2008, the most recent available, were 100% and 1.47x respectively.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.