--$2.9 million class MSH-2 to 'BB' from 'BBB'; Outlook Negative;

--$4.8 million class MSH-3 to 'BB-' from 'BBB-'; Outlook Stable;

--$4 million class MSH-4 to 'BB-' from 'BB+'; Outlook Stable;

--$1.8 million class ES-1 to 'BBB-' from 'BBB+'; Outlook Negative;

--$1.7 million class ES-2 to 'BB+' from 'BBB'; Outlook Negative;

--$1.5 million class ES-3 to 'BB' from 'BBB-'; Outlook Negative;

--$2.9 million class TC-1 to 'BB-'; Outlook Negative;

--$2.4 million class TC-2 to 'BB-'; Outlook Negative;

--$37 million class J to 'BBB'; Outlook Negative.

Additionally, Fitch affirms the following classes and adds Rating Outlooks as follows:

--$853.7 million class A-2 at 'AAA'; Outlook Stable;

--$507 million class A-J at 'AAA'; Outlook Stable;

--$94.9 million class B at 'AA+'; Outlook Stable;

--$66.7 million class C at 'AA+; Outlook Stable;

--$73.6 million class D at 'AA'; Outlook Stable;

--$54.7 million class E at 'AA-'; Outlook Stable;

--$54.7 million class F at 'A+'; Outlook Stable;

--$52.2 million class G at 'A+'; Outlook Stable;

--$32.5 million class H at 'A'; Outlook Stable;

--Interest Only classes X-1, X-2, X-3-BC, X-3-DB, X-3-SG, X-4, X-5-BC, X-5-DB, and X-5-SG at 'AAA'; Outlook Stable.

Class A-1 has paid in full.

Fitch also affirms the rake classes and adds Rating Outlooks as follows:

--$11.9 million class CN-1 at 'BBB'; Outlook Negative;

--$8.1 million class CN-2 at 'BBB'; Outlook Negative;

--$8 million class CN-3 at 'BBB-'; Outlook Negative;

--$73.1 million class KR-1 at 'BBB+'; Outlook Negative;

--$22.8 million class KR-2 at 'BBB'; Outlook Negative;

--$64.4 million class KR-3 at 'BBB-'; Outlook Negative;

--$6.8 million class IP-1 at 'BBB+'; Outlook Stable;

--$11.2 million class IP-2 at 'BBB'; Outlook Stable;

--$11 million class IP-3 at 'BBB-'; Outlook Stable;

--$5 million class HDC-1 at 'BBB+'; Outlook Stable;

--$6.5 million class FSH-1 at 'BBB+'; Outlook Negative;

--$8.7 million class FSH-2 at 'BBB'; Outlook Negative;

--$9.2 million class FSH-3 at 'BBB-'; Outlook Negative;

--$1.1 million class CA-2 at 'BBB'; Outlook Stable;

--$1.3 million class CA-3 at 'BBB-'; Outlook Stable;

--$1.4 million class CA-4 at 'BBB-'; Outlook Stable;

--$5.6 million class AN-3 at 'BBB-'; Outlook Stable;

--$4.5 million class AN-4 at 'BBB-'; Outlook Stable;

--$5.9 million class FG-1 at 'AA'; Outlook Negative;

--$6.1 million class FG-2 at 'A+'; Outlook Negative;

--$4.3 million class FG-3 at 'A-'; Outlook Negative;

--$5.5 million class FG-4 at 'BBB'; Outlook Negative;

--$7.2 million class FG-5 at 'BBB-'; Outlook Negative;

--$2.5 million class LS-1 at 'BBB+'; Outlook Stable;

--$2.7 million class LS-2 at 'BBB'; Outlook Stable;

--$2.6 million class LS-3 at 'BBB-'; Outlook Stable;

--$2.3 million class LB-1 at 'BBB+'; Outlook Stable;

--$1.6 million class LB-2 at 'BBB'; Outlook Stable;

--$1.6 million class LB-3 at 'BBB-'; Outlook Stable;

--$1.3 million class AH-1 at 'BBB+'; Outlook Stable;

--$1.3 million class AH-2 at 'BBB'; Outlook Stable;

--$1.5 million class AH-3 at 'BBB-'; Outlook Stable;

--$1.9 million class AH-4 at 'BB+'; Outlook Stable;

--$1.3 million class CM-1 at 'A-'; Outlook Stable;

--$2.5 million class CM-2 at 'BBB-'; Outlook Stable.

Rake class SR-1 has paid in full. Fitch does not rate classes CA-1, AN-1 and AN-2.

The downgrade of classes MSH-1, MSH-2, MSH-3, and MSH-4 is due to slower than expected recovery from ongoing renovations as well as renovations at certain properties that are behind schedule. The loan is secured by three hotels; Sheraton Suites San Diego (San Diego, CA), Sheraton Framington (Framington, MA) and Westin Embassy Row (Washington, DC). The borrower did not meet budget targets due to incomplete renovations and the properties not being fully operational. As a result, banquets, catering and transient business was turned away.

The downgrade of classes ES-1, ES-2 and ES-3 is due to declining performance at The Embassy Suites Lake Buena Vista (Orlando, FL). The property was renovated in early 2007 but has not realized significant performance gains as expected. Occupancy dropped approximately 5% from year-end (YE) 2007 to the twelve months ended July 31, 2008.

The downgrade of classes TC-1 and TC-2 is due to declining performance at The Avenue at Tower City (Cleveland, OH). The property's anchor tenant is Tower City Cinema. Occupancy has decreased to 88.6% at June 20, 2008 compared to 95.1% at YE 2007, in-line sales per square foot have declined from $279 to $266 for YE 2006 and YE 2007, respectively. Additionally expenses have increased approximately 30% since issuance and the overall economic outlook for the Cleveland area is negative.

The Rating Outlooks reflect likely rating changes over the next one to two years. Negative Outlooks reflect loans that are behind on their stabilization plans or where economic pressures may make execution of the original business plans less feasible.

As of the October 2008 distribution date, the total collateral balance has been reduced by 27.9% to $2.17 billion from $3 billion at issuance. Credit enhancement, however, has increased only marginally because of the transaction's modified sequential pay structure. The structure provides that, for all but one loan, 85% of any principal proceeds are allocated to the class A and A-J notes, with the remainder allocated to the remaining collateral classes B through J.

Since issuance in October 2006, the Strategic Hotel Portfolio loan has paid in full, along with its accompanying rake class. In addition, the balance of the Carr National Portfolio, the largest loan at issuance, was reduced by approximately 69% through paydown, and the Carr America Portfolio, the fifth largest loan at issuance, was paid down by approximately 74%. The Four Seasons Hualalai loan has paid down approximately 13% through the sale of residences in the resort-home portion of that collateral. The Albertson's (Newkirk) Portfolio has paid down 10.5% since issuance.

The four largest loans make up 67% of the transaction, and all except one loan in the deal (3%) have subordinate debt outside the transaction. In addition, three loans, including the two Carr Portfolio loans and the Kerzner International Portfolio, have debt that is pari passu with the debt obligations in other commercial mortgage backed securities transactions.

The remaining collateral consists of sixteen loans listed below in order of size. The collateral includes loans on hotels (60.7%), office (16.6%), multifamily (12.9%) and retail (9.8%) properties.

The loans are: Kerzner International Portfolio (31.9%); Independence Plaza (12.2%); Hotel del Coronado (12%); Carr America National Pool 3 (11%); Four Seasons Hualalai (8.1%); Albertson's (Newkirk) Portfolio (4.7%); MSREF Hotel Portfolio (3.1%); Superstition Springs Center (3.1%); Ft. Lauderdale Marina Marriott (3%); Legacy So Cal Portfolio (2.6%); The Avenue at Tower City (1.9%); Legacy Bayside (1.6%); Carr America Pool 2 (1.4%); Embassy Suites Lake Buena Vista (1.3%); Algonquin Hotel (1.4%); and Charleston Marriott (0.6%).

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.

SOURCE: Fitch Ratings

Fitch Ratings 
Brook Sutherland, +1-312-606-2346 (Chicago) 
Adam Fox, +1-212-908-0869 (New York) 
Sandro Scenga, +1-212-908-0278 
(Media Relations,New York) 
sandro.scenga@fitchratings.com

"We are thrilled that Colleen has taken over the role of president for NYCBTA," said Joe Carino, President, CARINO Collection. "We feel her leadership in this capacity further expresses the commitment of CARINO Collection to our hotels worldwide."

The NYCBTA is the leading voice and forum for travel industry education, research, support, and action on behalf of the New York City business travel community. The organization boasts over 250 members with many travel managers from the Fortune 500 in the New York City area. Upcoming NYCBTA events include Education Day on October 24, 2008 at New York City's Rainbow Room and the Annual Tradeshow on February 19, 2009 at The Marriott Marquis, with over 80 vendor exhibitors and 200 corporate travel buyers. For more information on the organization, visit www.nycbta.org.

CARINO Collection is the only hotel sales company that provides a centralized customer database, RFP tools and sales and marketing support for luxury hotels & resorts worldwide. With offices in New York and London, Chicago and Los Angeles, the CARINO Collection is a full service sales and customer information company, dedicated to assisting luxury hotels with the global sales process. At the heart of the Collection's suite of services is SalesConnect 2.0TM, a web-based software tool comprised of corporate, leisure and group account data and activity. For more information on the CARINO Collection, please visit the website at www.carinocollection.com or call 212-808-6590.

PHOTOS AVAILABLE UPON REQUEST

SOURCE: CARINO Collection

LMP International 
Tammy Petersen, 312-988-4811 
tammy@lmpinternational.com