Fitch Affirms FREMF 2012-K706 and Freddie Mac Pass-Through Certificates, Series K-706

  Fitch Affirms FREMF 2012-K706 and Freddie Mac Pass-Through Certificates,
  Series K-706

Business Wire

NEW YORK -- February 5, 2014

Fitch Ratings has affirmed six classes of FREMF 2012-K706 multifamily mortgage
pass-through certificates and three classes of Freddie Mac structured
pass-through certificates, series K-706. A detailed list of rating actions
follows at the end of this press release.

KEY RATING DRIVERS

The affirmations are based on the stable performance of the underlying
collateral pool. As of the January 2014 distribution date, the pool has had no
delinquent or specially serviced loans. The pool's aggregate principal balance
has been paid down by 0.7% to $1.22 billion from $1.23 billion at issuance.
The pool's overall net operating income (NOI) has been stable with an 8.1% NOI
increase compared to issuer underwriting at issuance.

The largest loan of the pool (10.1% of the pool) is secured by Crystal Plaza,
a 539-unit, high-rise apartment complex situated on approximately five acres
in Arlington, VA. The property was built in 1967 and underwent capital
improvements in 2003. The property benefits from attractive amenities,
proximity to Washington, D.C., and access to public transportation, employment
centers, retail shopping, and major thoroughfares. Amenities include an
outdoor swimming pool, barbecue grills and outdoor dining tables, 24-hour
concierge, two 24-hour fitness centers, internet lounge, central courtyard,
game room, business center, rooftop sundeck, conference room, library, two
laundry facilities, and garage parking. Occupancy was 88% as of September 2013
compared to 94% at issuance.

The second largest loan (5.9% of the pool) is secured by Paradise Island, a
1,112-unit, 55-building apartment complex located in Jacksonville, FL. The
property was developed in four phases between 1990 and 1999 and renovated in
2010. Property amenities include four swimming pools, a community center,
leasing and management offices, laundry facilities, fitness centers,
racquetball, tennis, and volleyball courts, a car wash, and garages. Occupancy
was 96% as of September 2013 compared to 92.5% as of January 2012 at issuance.
The loan contains a $61.76 A-note and a $10 million subordinate B note ($10.0
million).

The third largest loan (3.8% of the pool) is secured by Cascade Ridge
Apartments, a 518-unit, 48 building multifamily property located in Federal
Way, WA. The property was built in 1989 and renovated from 2007-2008. The
property is situated on 29 acres, approximately 10 miles north of Tacoma and
features an attractive amenities package. Occupancy was 93% as of June 2013,
which is in-line with 93% at issuance.

Fitch affirms the following classes as indicated:

FREMF 2012-K706 Multifamily Mortgage Pass-Through Certificates

--$80.9 million class A-1 at 'AAAsf'; Outlook Stable;

--$933.0 million class A-2 at 'AAAsf'; Outlook Stable;

--$1.01 billion* class X1 at 'AAAsf'; Outlook Stable;

--$1.01 billion* class X2-A at 'AAAsf'; Outlook Stable;

--71.4 million class B at 'Asf'; Outlook Stable;

--30.4 million class C at 'BBBsf'; Outlook Stable.

Freddie Mac Structured Pass-Through Certificates, Series K-706

--$80.9 million class A-1 at 'AAAsf'; Outlook Stable;

--$933.0 million class A-2 at 'AAAsf'; Outlook Stable;

--$1.01 billion* class X1 at 'AAAsf'; Outlook Stable.

*Notional amount and interest only.

Of FREMF 2012-K706, Fitch does not rate the $193.0 million interest-only class
X2-B, the $193.0 million interest-only class X3, the $91.2 million class D, or
$10.0 million class P. Of the Freddie Mac Structured Pass-Through
Certificates, Series K-706, Fitch does not rate the $193.0 million
interest-only class X3.

RATING SENSITIVITY

Rating Outlooks on all Fitch rated classes remain Stable. Due to the recent
issuance of the transaction and stable performance, Fitch does not foresee
positive or negative ratings migration until a material economic or asset
level event changes the transaction's overall portfolio-level metrics.
Additional information on rating sensitivity is available in the 'FREMF
2012-K706 Multifamily Mortgage Pass-Through Certificates and Freddie Mac
Structured Pass-Through Certificates, Series K-706' (March 12, 2012) new issue
report, available at www.fitchratings.com.

Additional information on Fitch's criteria for analyzing U.S. CMBS
transactions is available in the Dec. 11, 2013 report, 'U.S. Fixed-Rate
Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at
'www.fitchratings.com' under the following headers:

Structured Finance >> CMBS >> Criteria Reports

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 24, 2013);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria'
(Dec. 11, 2013).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724961

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=819726

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Contact:

Fitch Ratings
Primary Analyst
Martin Nunnally, +1-212-908-0871
Associate Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Committee Chairperson
Mary MacNeill, +1-212-908-0785
Managing Director
or
Media Relations, New York
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com
 
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