2008-07-18 19:36:09 -

- Fitch Ratings downgrades Morgan Stanley Capital I Trust 2006-IQ11, commercial mortgage pass-through certificates as follows:

--$8.1 million class J to 'BB' from 'BB+';

--$4.0 million class K to 'BB-' from 'BB';

--$4.0 million class L to 'B+' from 'BB-'.

Fitch also places the following classes on Rating Watch Negative:

--$18.2 million class G at

'BBB';

--$14.1 million class H at 'BBB-'.

In addition, Fitch affirms the following:

--$27.0 million class A-1 at 'AAA';

--$323.1 million class A-1A at 'AAA';

--$162.9 million class A-2 at 'AAA';

--$96.8 million class A-3 at 'AAA';

--$490 million class A-4 at 'AAA';

--$161.6 million class A-M at 'AAA';

--$147.5 million class A-J at 'AAA';

--Interest-only class X at 'AAA';

--Interest-only class X-Y at 'AAA';

--$30.3 million class B at 'AA';

--$12.1 million class C at 'AA-';

--$22.2 million class D at 'A';

--$16.2 million class E at 'A-';

--$14.1 million class F at 'BBB+'.

Fitch does not rate the $6.1 million class M, $6.1 million class N, $2.0 million class O or $18.2 million class P.

The downgrade reflects the increase in specially serviced assets since Fitch's last rating action, in addition to an increase in Fitch's expected losses on the specially serviced assets. Class G and class H may be downgraded if expected recoveries on the specially serviced assets continue to decline or new loans become specially serviced. As of the June 2008 distribution date, the pool has paid down 2%, to $1.58 billion from $1.61 billion at issuance.

Fitch has identified thirteen Loans of Concern (7.2%) including five specially serviced assets (5.8%). The largest specially serviced asset is an industrial property (3.5%) in Phoenix, AZ, which transferred to the special servicer when the single tenant, LeNature, filed for bankruptcy and vacated the space. The loan remains current under the forbearance agreement and loan assumption negotiated in June 2008 by a wholly-owned subsidiary of CB Richard Ellis Investors, LLC. The property is actively being marketed for a replacement tenant.

The second largest Loan of Concern (1%) is a portfolio of two retail properties, located in Michigan and New Jersey, and is specially serviced. The portfolio transferred to special servicing in June 2008 for monetary default.

The largest loan (10.1%) is secured by a 1.87 million square foot (sf) office property in Chicago, IL. Occupancy as of December 2007 was 76%, in-line with issuance.

The second largest loan (6.0%) is secured by a retail mall located in the Riverwalk district of San Antonio, TX. Occupancy as of December 2007 was 91% compared to 95% at issuance.

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.

Fitch Ratings, New York
Jeffrey Diliberto, +1-212-908-9173
Adam Fox, +1-212-908-0869
Sandro Scenga, +1-212-908-0278 (Media Relations)