Fitch Ratings Upgrades GS Mortgage Series 1997 GL-I.

Business Editors

NEW YORK--(BUSINESS WIRE)--Feb. 4, 2004

Fitch Ratings upgrades GS Mortgage Securities Corp. II's commercial mortgage pass-through certificates, series 1997 GL-I, as follows:

-- $53.8 million class D to 'AAA' from 'AA+';

-- $14.7 million class E to 'AA+' from 'AA-';

-- $48.9 million class F to 'A' from 'BBB+';

-- $58.6 million class G to 'BBB+' from 'BBB'.

In addition, the following classes are affirmed by Fitch:

-- $23.7 million class A-1 'AAA';

-- $28.9 million class A-2C 'AAA';

-- $222.2 million class A-2D 'AAA';

-- $78.2 million class B 'AAA';

-- $14.7 million class C 'AAA';

-- Interest only classes X-1A, X-1B, and X-2 'AAA';

-- $34.2 million class H 'BB+';

-- $9.6 million class M 'BBB'.

The rating on class M, whose sole collateral is two partnership level loans associated with the Montehiedra loan, is dependent on Fitch's rating of Vornado Realty LP, the guarantor of the loans. The class M certificate does not provide credit support to any other class of certificates. Class A-2A and class A-2B have been paid in full.

The upgrades reflect the defeasance of the Ritz Plaza loan (10% of the current transaction balance) with U.S. government securities, and the improved debt service coverage ratios (DSCRs) of the non-defeased loans, most of which are significantly higher than at issuance. Since Fitch's last review, the fully defeased Cadillac Fairview pool loan (29% of the transaction balance at that time) was repaid. On average, the remaining loans have amortized 10.6% since issuance.

As part of its review, Fitch examined the performance of each loan and its underlying collateral. The corresponding DSCRs noted below are Fitch-stressed, based on the application of a refinance constant to the current principal balance, and consistent use of the original haircuts to determine net cash flow. For the pool as a whole, the DSCR is 1.98 times (x), compared to 1.64x at issuance. Five of the six loans in the pool (86%) have investment grade credit assessments.

The Century Plaza Towers loan (37%) is secured by two twin 44-story class A office buildings located in Century City, CA, with 2.2 million square feet (sf) of office space, 27,460 sf of arcade retail space, and a six-level subterranean parking structure. The DSCR for the trailing twelve months (TTM) September 2003 improved to 2.30x, from 1.60x at issuance, despite occupancy declines from origination to a low of 83.4% at year-end (YE) 2003. Fitch is concerned that leases on 16% of the office space will expire in 2004. The property represents 21% of the Century City office sub-market, in which current market vacancy is approximately 20%, and market rents are approximately equal to average current rents at the property. The servicer, however, holds an $11.5 million letter of credit for retenanting purposes.

The Brandywine A (formerly AAPT) loan (15%) is currently collateralized by a pool of 17 office properties, five industrial/flex properties (aggregating 1.8 million sf) and two undeveloped land parcels. The TTM June 2003 DSCR is 2.15x, the same as for YE 2002. This is an improvement from 1.34x at issuance, which consisted of a 46-property pool. The weighted average (WA) occupancy as of June 2003 was 88%, a decrease from August 2000's 91%, and from 97% at issuance.

The 380 Madison Avenue loan (15%) is secured by the leased fee interest in a 25-story office building in midtown Manhattan in New York City. The borrower leases 100% of the building to Spartan Madison Corp., which is required to pay the borrower annual net rent until the lease expiration in 2014. The YE 2002 Fitch DSCR is 1.73x, stable since 1998 based on the master lease payments; it is expected to improve in 2004 due to the lease's scheduled rent increase in January 2004. Madison Avenue office submarket rents are currently $48 gross per square foot, more than twice the net rents due on the master lease.

The Brandywine C (formerly CAP) loan (14%) is currently secured by a pool of 16 office, 14 flex/research and development properties, and one warehouse, aggregating 1.6 million square feet. The TTM June 2003 DSCR is 1.36x, compared to 1.43x for YE 2002, still an improvement from 1.33x at issuance. The decline in DSCR is primarily caused by occupancy changes.

The Montehiedra loan (9%) is secured by Montehiedra Town Center, a 525,000-sf anchored retail shopping mall located 8 miles south of downtown San Juan, Puerto Rico. The four anchor tenants at the center are Kmart (24% of the property's net rentable area), Masso Expo (20%), Caribbean Theatres (9%), and Marshall's (expanded to 9% from 5% at origination). Fitch is concerned about the 24% in-line vacancy rate, although debt service coverage is still high: the TTM September 2003 DSCR is 1.63x, down from 1.77x at YE 2002, but improved from 1.47x at issuance. The YE 2002 sales for the anchor tenants remain strong, though less than at origination.