Fitch Upgrades 3 & Affirms 7 of Diversified REIT Trust 1999-1 Ltd./Corp.

NEW YORK -- Fitch Ratings upgrades three classes and affirms seven classes of notes issued by Diversified REIT Trust 1999-1 Ltd./Corp. (DREIT 1999-1). The following rating actions are effective immediately:

--$52,979,107 class A-1 affirm at 'AAA';

--$187,728,092 class A-2 affirm at 'AAA';

--$31,125,600 class B affirm at 'AAA';

--$31,125,600 class C affirm at 'AAA';

--$41,500,800 class D upgrade to 'AA' from 'A+';

--$23,344,200 class E upgrade to 'BBB' from 'BBB-';

--$5,187,600 class F upgrade to 'BB+' from 'BB';

--$7,781,400 class G affirm at 'BB-';

--$5,187,600 class H affirm at 'B';

--class X notes (interest only) affirm at 'AAA'.

DREIT 1999-1 is a collateralized debt obligation (CDO) which closed May 26, 1999. DREIT 1999-1 is composed of a static pool of senior unsecured real estate investment trust (REIT) securities.

The portfolio, since last review on Aug. 10, 2006, has paid down an additional 14.18% of the original capital structure. Fitch has reviewed the credit quality of the individual assets comprising the portfolio. The Fitch weighted average rating factor has improved to 6.12 as of November 28, 2006 compared to 6.64 at last rating review. Since the last review, the portfolio assets have experienced more upgrades than downgrades. The calculated weighted average coupon has also remained stable and is currently at 7.37%. The seasoning of the collateral can be illustrated by the declining weighted average life (WAL). Fitch's WAL of the portfolio declined to 1.57 years as of November 28, 2006 versus 1.65 years at last review.

The notes pay principal in sequential order and there are no over-collateralization or interest coverage tests. There are currently no defaulted assets in the portfolio.

Fitch will continue to monitor and review this transaction for future rating adjustments. Additional deal information and historical data are available on the Fitch Ratings web site at (www.fitchratings.com). (For more information on the Fitch VECTOR Model, see 'Global Rating Criteria for Collateralised Debt Obligations,' dated Oct. 4, 2006, available on Fitch's web site at www.fitchratings.com).

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.