Fitch Upgrades TIAA Real Estate CDO 2002-1.

NEW YORK -- Fitch has upgraded two and affirmed three classes of the notes issued by TIAA Real Estate CDO 2002-1 Ltd. (TIAA 2002-1). The Preferred Equity class has been paid in full. These rating actions are the result of Fitch's review process.

The following rating actions are effective immediately:

--$312,794,166 class I notes affirmed at 'AAA';

--$17,000,000 class II-FL notes upgraded to 'AA from 'A+';

--$17,000,000 class II-FX notes upgraded to 'AA' from 'A+';

--$46,500,000 class III notes affirmed at 'BBB+';

--$17,500,000 class IV notes affirmed at 'BB';

--$25,000,000 Preferred Equity 'PIF'.

TIAA 2002-1 is a collateralized debt obligation (CDO), which closed May 22, 2002, supported by a static pool of commercial mortgage-backed securities (70.1%), senior unsecured real estate investment trust (28.5%) securities, and CDO (1.4%). TIAA Advisory Services LLC selected the initial collateral and serves as the collateral administrator.

The upgrades of the class II-FL, II-FX and III notes are driven primarily by the improved credit quality of the portfolio, seasoning of the collateral, and delevering of the capital structure. The CDO has paid down $64.2 million since issuance, representing 12.8% of the collateral. Since Fitch's last review, 13.4% of the portfolio has been upgraded an average of 2.1 notches and 4.32% has been downgraded 1.7 notches. The weighted average rating factor remains in the 'BBB/BBB-' category. The weighted average life (WAL) has decreased to 5.94 from 6.91. All par and interest coverage ratios have remained stable since inception. There are currently no defaulted assets in the portfolio. The CMBS assets in the collateral pool ranges from the 1997 vintage to the 2001 vintage with none being first loss classes. Due to defeasance and amortization, Fitch believes these CMBS vintages are a positive factor in this transaction.

The rating on the class I note addresses the timely payment of interest and ultimate repayment of principal. The ratings on the class II-FL, class II-FX, class III and class IV notes address the ultimate payment of interest and ultimate repayment of principal. The original rating of the preferred shares addressed the likelihood that investors would receive their stated balance of principal by the legal final maturity date. As of the February 2007 trustee report, the preferred shares have received distributions in excess of the $25,000,000 original rated balance and therefore are deemed to be paid in full by Fitch.

Fitch conducted cash flow modeling utilizing various default timing and interest rate scenarios to measure the breakeven default rates going forward relative to the minimum cumulative default rates required for the rated liabilities.

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.

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