Fitch Downgrades 2 Classes of GMAC 1998-C2; Assigns Outlooks.

NEW YORK -- Fitch Ratings downgrades GMAC Commercial Mortgage Securities, Inc., series 1998-C2 as follows:

--$19.0 million class K to 'B-' from 'BB-'and assigned a distressed recovery (DR) rating of 'DR1'.

--$25.3 million class L to 'C/DR6' from 'CC/DR3'.

Fitch also affirms and assigns Rating Outlooks to the following classes:

--Interest-only (IO) class X at 'AAA'; Outlook Stable;

--$56.5 million class D at 'AAA'; Outlook Stable;

--$38.0 million class E at 'AAA'; Outlook Stable;

--$88.6 million class F at 'AAA'; Outlook Stable;

--$44.3 million class G at 'AAA'; Outlook Stable;

--$19.0 million class H at 'A'; Outlook Stable;

--$19.0 million class J at 'BB+'; Outlook Stable.

The $11.2 million class M remains at 'C/DR6'. Classes A-1, A-2, B and C have paid in full.

The downgrades are the result of an increase in expected losses on specially serviced assets coupled with the recent transfer to special servicing of nine single-tenant properties occupied by Circuit City. Rating Outlooks reflect the likely direction of any rating changes over the next one to two years. As of the January 2009 distribution date, the transaction's principal balance decreased 87.3% to $320.8 million compared to $2.53 billion at issuance. Fourteen of the remaining loans (27.3%) have defeased.

Fitch has identified 26 Loans of Concern (27.6%), which includes 15 specially serviced assets (18.0%) with significant losses anticipated. The specially serviced assets include nine recently transferred single-tenant properties (10.1%) occupied by Circuit City, which has filed for bankruptcy and plans to liquidate in early 2009. These eight retail and one industrial warehouse properties are located in various states. In addition, another loan secured by a Circuit City occupied retail property (1.2%), located in Cortlandt, NY, has not transferred to special servicing as of January 2009. Fitch expects all the loans backed by Circuit City-occupied properties to incur a loss upon liquidation.

The largest remaining loan (7.0%) is secured by a portfolio of industrial warehouse facilities located throughout Connecticut. The servicer reported September 2008 occupancy was 90.2% with a debt service coverage ratio (DSCR) of 1.38 times (x). The loan is scheduled to mature in 2023.

The second largest loan (3.9%) is secured by a 639-unit multifamily property in Boulder, CO. The servicer reported September 2008 occupancy was 78.5% with a DSCR of 2.12x. The loan is scheduled to mature in 2028, however, the loan has an anticipated repayment date (ARD) of February 2009. The borrower does not expect to payoff the loan at the ARD.

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