| 1E - DSCR < 1.10, 1F - U/W drop,4B - EGI drop & 2C - Servicing Trigger. The loan is secured by a 279 room lodging property in Palm Beach, FL. The property was inspected on 03/12/09; rated in Good condition.TTM ending 06/09 NCF DSCR is .70 with occ of 75.88%, ADR of $113.32, & RevPar of $86.21. The decline in NCF is a result of an EGI decline. Reported TTM 06/09 room rev have declined 16% from YE \''08. The 05/09 STAR report indicates the property occ ADR, & RevPar was 71.1%, $109.26, & $77.71 respectively. Comp Set Occ, ADR, & RevPar was 68.5%, $115.69, & $79.22 respectively. Per Bwr,the property has seen a dramatic erosion in rate during winter season as volume of corp traffic has diminished & Bwr acceptance of discounted e-commerce room nights has increased. Per Bwr, the comp climate in the mkt has intensified over the past 6-8 mos with some of the higher rated players in the comp set dropping rate & going after group & contract business. The prop. has had the effect of reducing rates to virtually all of their LNR's &groups in order to retain these customers. Bwr has noticed a reduced volume of Fl Power & Light room nights, due to their reduction of 50% of their training classes. Bwr plan to increase NCF in 2009 is to have the sales team focus on the relationships with their top accounts. Per bwr, group sales effort has done well in securing business in season & in off season. Prop continues to use Expedia, Travelocity &the other 3rd party booking engines to fill in gaps in occ, albeit at lower rates. To offset the revenue declines, Bwr is implementing staffing reductions & hourly position cuts to control costs while remaining mgt staff will cover the eliminated positions to ensure that prop. is delivering proper service to its guests & to offset the decline in ADR. Additionally, a Trigger Event occurred due to DSCR was below a 1.00 & loan become cash managed eff. with 04/01/09 payment. Bank of America will continue to monitor the loan.
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