Fitch Ratings Upgrades 3 Classes of GSMC II 1998 GL-II.

NEW YORK -- GS Mortgage Securities (GSMC) Corporation II's, commercial mortgage pass-through certificates, series 1998-GL II are upgraded by Fitch Ratings as follows:

-- $91.6 million class B to 'AA+' from 'AA';

-- $84.5 million class C to 'A+' from 'A';

-- $98.6 million class D to 'BBB+' from "BBB';

In addition, the following classes are affirmed:

-- $98.6 million class A-1 at 'AAA';

-- $694.3 million class A-2 at 'AAA';

-- Interest only class X at 'AAA';

-- $70.5 million class E at 'BBB-';

-- $63.4 million class F at 'BB'

-- $28.2 million class G at 'B-'

The upgrades are due primarily to the defeasance of the Pier 39 loan, a retail/entertainment complex in San Francisco, CA, and amortization of 12.7% resulting in delevering of the loans.

Although net cash flow (NCF) for most of the loans has declined, due to amortization, the overall Fitch weighted average debt service coverage ratio (DSCR) is stable at 1.39 times (x) as of trailing twelve months (TTM) ending June 30, 2004 compared to 1.38x at issuance. As part of its review, Fitch analyzed the performance of each loan and the underlying collateral. The DSCRs are calculated using Fitch adjusted net cash flow and debt service payments based on the current balance and Fitch's stressed refinance constant.

The Marriott Desert Springs loan (7.4%), an 884 room luxury hotel located in Palm Desert, California, has experienced a severe decline in NCF since issuance due to increased competition in the area. However, recent performance has improved: revenue per available room (RevPAR) increased to $119 as of TTM June 04, from $110 as of year-end 2003 (YE'03). The servicer reported TTM June 2004 NCF decreased 28.6% since issuance. The Fitch adjusted DSCR is 1.37x as of TTM June 30, 2004, up from 1.28x as of TTM June 2003, and compared to 1.71x at issuance. Although performance has declined, refinance risk is not an immediate concern as the loan's anticipated repayment date is not until 2010. The credit assessment for this loan remains below investment grade.

Although Fitch is concerned with the pool's concentration of limited service hotels (25.8%) and cold storage (28.7%), each loan is collateralized by a geographically diverse pool of properties.

The Tharaldson Pools A and B represent a combined 26% of the pool's principal balance, and are secured by 86 and 90 limited service hotels, respectively. The DSCR as of TTM June 30, 2004 for Pool A has decreased to 1.56x from 1.66x at issuance. The TTM June 30, 2004 DSCR for Pool B increased to 1.60x from 1.59x as of TTM June 30, 2003, and 1.67x at issuance. Increases in room expense and operations and maintenance in both pools contributed to decreased NCF.

The two cold storage pools have remained stable. The DSCR as of TTM June 30, 2004 for the URS loan (18%) increased to 1.56x from 1.54x as of TTM June 2003, and decreased slightly from 1.57x at issuance. The Americold loan (11%), representing a 50% participation interest in the whole loan, showed improved performance during the most recent TTM period. The corresponding DSCR as of TTM June 30, 2004 increased to 1.64x from 1.61x at issuance.

The Green Acres loan (11.9%) is secured by a regional mall in Valley Stream, NY. The Sterns anchor vacated in August 2001. Federated Department Stores, parent company of both Sterns's and Macy's, has taken the majority of the space to expand Macy's one of three anchor tenants at the mall. The former Kmart space has been leased by Wal-Mart as of October 2003, increasing overall mall occupancy to 97% as of August 2004. As a result of increased occupancy, performance has increased markedly. As of TTM June 2004, the DSCR is 1.65x compared to 1.49x as of TTM June 2003, and 1.36x at issuance.

The Las Vegas Showcase (5.8%) is a retail/entertainment complex in Las Vegas, NV. The former Boxing Hall of Fame space (36,172 sq. ft.) has been converted to a food court with several smaller units. With the completion of the food court conversion, occupancy has increased to 100% as of August 2004, up from 75% at issuance. Based on leases in place, the pro forma DSCR increased to 1.18x compared to 1.05x as of TTM June 2003, and 1.18x at issuance.

The One Commerce Square loan (6%) is secured by an office property in downtown Philadelphia, PA. International Business Machines Corp. (IBM), with 53% of net rentable area (NRA), vacated the building in September 2002. IBM was paying significantly above market rent, and although leasing activity has been strong, the current rental rates are well below IBM's rental rate. As a result NCF as of TTM June 04 has decreased 14.8% from TTM June 03. The corresponding DSCR as of TTM June 04 is 1.32x compared to 1.53x as of TTM June 03, and 1.09x at issuance.

Performance has improved at the Crystal City loan (5%), a mini-pool of three office properties in Crystal City, VA. The DSCR as of TTM June 30, 2004 increased to 1.55x, from 1.36x at issuance. As of June 2004, the three properties are 95.5% occupied, compared to 94% as of June 2003. However, NCF decreased 7.4% as of TTM June 2004 compared to TTM June 2003, as a result of increased expenses and rental downtime. The corresponding DSCR is 1.55x as of TTM June 04, compared to 1.64x as of TTM June 03, and 1.36x at issuance.