8-K 1 flb98c02_dec.txt DECEMBER 8K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: December 20, 2004 (Date of earliest event reported) Commission File No.: 333-48943-04 First Union-Lehman Brothers-Bank of America Commercial Mortgage Trust Commercial Mortgage Pass-Through Certificates Series 1998-C2 (Exact name of registrant as specified in its charter) New York (governing law of Pooling and Servicing Agreement) (State of Incorporation) 52-2107968 52-2107969 52-2107970 52-6929147 (I.R.S. Employer Identification No.) c/o Wells Fargo Bank, N.A. 9062 Old Annapolis Road Columbia, MD 21045 (Address of principal executive offices) (Zip Code) (410) 884-2000 Registrant's Full Telephone Number (Former name, former address and former fiscal year, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act(17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act(17 CFR 240.13e-4(c)) ITEM 8.01 Other Events On December 20, 2004, a distribution was made to holders of First Union-Lehman Brothers-Bank of America Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 1998-C2. ITEM 9.01 Financial Statements and Exhibits (c) Exhibits Exhibit Number Description EX-99.1 Monthly report distributed to holders of Commercial Mortgage Pass-Through Certificates, Series 1998-C2, relating to the December 20, 2004 distribution. Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. First Union-Lehman Brothers-Bank of America Commercial Mortgage Trust Commercial Mortgage Pass-Through Certificates Series 1998-C2 (Registrant) By: Wells Fargo Bank, N.A. as Trustee By: /s/ Beth Belfield, Assistant Vice President By: Beth Belfield, Assistant Vice President Date: December 20, 2004 INDEX TO EXHIBITS Exhibit Number Description EX-99.1 Monthly report distributed to holders of Commercial Mortgage Pass-Through Certificates, Series 1998-C2, relating to the December 20, 2004 distribution. Wells Fargo Bank, N.A. Corporate Trust Services 9062 Old Annapolis Road Columbia, MD 21045-1951 First Union-Lehman Brothers-Bank of America Commercial Mortgage Trust Commercial Mortgage Pass-Through Certificates Series 1998-C2 For Additional Information, please contact CTSLink Customer Service (301) 815-6600 Reports Available on the World Wide Web @ www.ctslink.com/cmbs Payment Date: December 20, 2004 Record Date: November 30, 2004 This Trustee refers Certificateholders to recent notices from the Special Servicer in connection with ongoing lawsuits. The notices are currently posted on www.ctslink.com/cmbs. Updates will be posted in this location as they are received from the Special Servicer. Any inquiries on this matter should be directed to the Special Servicer. DISTRIBUTION DATE STATEMENT Table of Contents STATEMENT SECTIONS PAGE(s) Certificate Distribution Detail 2 Certificate Factor Detail 3 Reconciliation Detail 4 Other Required Information 5 Cash Reconciliation 6 Ratings Detail 7 Current Mortgage Loan and Property Stratification Tables 8 - 10 Mortgage Loan Detail 11 - 29 Principal Prepayment Detail 30 Historical Detail 31 Delinquency Loan Detail 32 - 33 Specially Serviced Loan Detail 34 - 40 Modified Loan Detail 41 Liquidated Loan Detail 42 Underwriter Lehman Brothers Inc. 3 World Financial Center New York, NY 10285 Contact: Tricia Hall Phone Number: (212) 526-5850 Underwriter First Union Capital Markets One First Union Center 301 South College Street Charlotte, NC 28288 Contact: Craig M. Lieberman Phone Number: (704) 383-7407 Servicer ORIX Capital Markets, LLC 1717 Main Street, 14th Floor Dallas, TX 75201 Contact: Don Kalescky Phone Number: (214) 237-2294 Special Servicer ORIX Capital Markets, LLC 1717 Main Street, 14th Floor Dallas, TX 75201 Contact: Don Kalescky Phone Number: (214) 237-2294 This report has been compiled from information provided to Wells Fargo Bank, N.A. by various third parties, which may include the Servicer, Master Servicer, Special Servicer and others. Wells Fargo Bank, N.A. has not independently confirmed the accuracy of information received from these third parties and assumes no duty to do so. Wells Fargo Bank, N.A. expressly disclaims any responsibility for the accuracy or completeness of information furnished by third parties. Copyright 2004, Wells Fargo Bank, N.A.

Cash Reconciliation Detail Total Funds Collected Interest: Scheduled Interest 16,787,997.12 Interest reductions due to Nonrecoverability Determinations 0.00 Interest Adjustments 0.00 Deferred Interest 0.00 Net Prepayment Interest Shortfall 0.00 Net Prepayment Interest Excess 0.00 Extension Interest 0.00 Interest Reserve Withdrawal 0.00 Total Interest Collected 16,787,997.12 Principal: Scheduled Principal 5,457,801.59 Unscheduled Principal 19,124,767.70 Principal Prepayments 19,124,767.70 Collection of Principal after Maturity Date 0.00 Recoveries from Liquidation and Insurance Proceeds 0.00 Excess of Prior Principal Amounts paid 0.00 Curtailments 0.00 Negative Amortization 0.00 Principal Adjustments 0.00 Total Principal Collected 24,582,569.29 Other: Prepayment Penalties/Yield Maintenance 0.00 Repayment Fees 0.00 Borrower Option Extension Fees 0.00 Equity Payments Received 0.00 Net Swap Counterparty Payments Received 0.00 Total Other Collected: 0.00 Total Funds Collected 41,370,566.41 Total Funds Distributed Fees: Master Servicing Fee 220,144.46 Trustee Fee 2,791.68 Certificate Administration Fee 0.00 Insurer Fee 0.00 Miscellaneous Fee 0.00 Total Fees 222,936.13 Additional Trust Fund Expenses: Reimbursement for Interest on Advances 1,847.02 ASER Amount 2,389.24 Special Servicing Fee 47,018.42 Rating Agency Expenses 0.00 Attorney Fees & Expenses 0.00 Bankruptcy Expense 0.00 Taxes Imposed on Trust Fund 0.00 Non-Recoverable Advances 0.00 Other Expenses 515,074.00 Total Additional Trust Fund Expenses 566,328.68 Interest Reserve Deposit 0.00 Payments to Certificateholders & Others: Interest Distribution 15,998,732.33 Principal Distribution 24,582,569.28 Prepayment Penalties/Yield Maintenance 0.00 Borrower Option Extension Fees 0.00 Equity Payments Paid 0.00 Net Swap Counterparty Payments Paid 0.00 Total Payments to Certificateholders & Others 40,581,301.61 Total Funds Distributed 41,370,566.42

Net Remaining Loan Operating DSCR Note Maturity Amortization Number Income Date DSCR Date Date Term 355132459 6,773,914.00 06/30/2004 1.62 06/01/1998 05/01/2013 280 440000022 658,139.00 12/31/2003 0.65 04/01/1998 03/01/2028 278 180000396 05/01/1998 07/01/2019 174 245114323 352,595.00 12/31/2003 0.49 02/01/1998 01/01/2008 216 240000160 (649,115.00) 09/30/2003 (1.41) 04/01/1998 03/01/2008 278 245114324 426,066.00 12/31/2003 0.88 02/01/1998 01/01/2008 216 245114322 236,233.00 12/31/2003 0.51 02/01/1998 01/01/2008 216 440000217 316,073.00 06/30/2004 0.83 04/01/1998 03/01/2023 218 240000258 345,185.00 09/30/2003 1.00 05/01/1998 04/01/2008 219 180000295 (67,652.00) 06/30/2004 (0.23) 03/01/1998 02/01/2008 277 240000277 (485,220.00) 12/31/2003 (1.52) 05/01/1998 04/01/2008 219 245114268 559,597.00 03/31/2004 2.04 01/01/1998 12/01/2007 215 245114181 297,296.00 06/30/2004 1.27 02/01/1998 01/01/2008 216 240000390 96,280.00 09/30/2003 0.48 04/01/1998 03/01/2008 278 195114158 340,650.00 06/30/2004 1.37 12/01/1997 11/01/2007 178 245114290 397,073.00 12/31/2003 1.90 04/01/1998 03/01/2018 158 (1) Resolution Strategy Code 1 - Modification 2 - Foreclosure 3 - Bankruptcy 4 - Extension 5 - Note Sale 6 - DPO 7 - REO 8 - Resolved 9 - Pending Return to Master Servicer 10 - Deed in Lieu Of Foreclosure 11 - Full Payoff 12 - Reps and Warranties 13 - Other or TBD (2) Property Type Code MF - Multi-Family RT - Retail HC - Health Care IN - Industrial WH - Warehouse MH - Mobile Home Park OF - Office MU - Mixed Use LO - Lodging SS - Self Storage OT - Other

Specially Serviced Loan Detail - Part 2 Offering Document Resolution Site Other REO Loan Cross Strategy Inspection Phase 1 Appraisal Appraisal Property Number Reference Code (1) Date Date Date Value Revenue 355132459 5 9 03/27/1998 105,000,000.00 440000022 22 1 9,840,000.00 180000396 52 7 03/03/2004 6,850,000.00 245114323 90 8 04/27/2004 4,300,000.00 240000160 160 9 12/27/1997 7,710,000.00 245114324 180 7 04/27/2004 4,600,000.00 245114322 185 7 04/26/2004 3,300,000.00 440000217 217 9 11/17/1997 5,900,000.00 240000258 258 3 06/01/2004 3,300,000.00 180000295 268 2 11/10/2003 2,850,000.00 240000277 277 2 03/05/2004 1,690,000.00 245114268 342 9 09/01/1997 4,300,000.00 245114181 375 13 03/02/2004 3,170,000.00 240000390 390 7 12/11/2003 1,500,000.00 195114158 398 13 06/30/2003 3,200,000.00 245114290 461 13 11/28/1997 2,950,000.00

Loan Number Comments from Special Servicer 355132459 Please refer to Servicer Reports for comments as they are to lengthy to include. 440000022 Transferred to SS on 7/23/03, due to reasonably foreseeable default. Borrower has sold 3 of the 11 properties (approved by SS). There is still significant risk due to poor tenant mix, market, etc in the 8 remaining properties.The most recent Forbearance Agreement terminated automatically upon the sale of 201 S. Central. Lockbox had shortage of approximately $16,000 in November '04, and Borrower struggled to pay the shortage amount. A loan modification is being considered with possible reamortization, which will keep the loan in performing status for the foreseeable future and will give the Borrower a chance to make the properties successful for the long term. 180000396 The Collateral is under contract for $5.355mm. The due diligence period expires 12/10/04, however The Buyer informed OCM that he has been sequestered for jury duty in a capital murder trial, thus a delay of DD is possible. Closing is currently scheduled to occur no later than 12/30/04 but may be delayed accordingly.The Collateral had been under contract at $6,825,000. At the end of DD the Buyer requested a price reduction of $1.8mm due to alleged structural and mechanical defects. Negotiations to and the Buyer terminated the contract on 10/25. The Brokers approached all previously-interested parties and generated offers from $5.0mm - $5.355mm. 245114323 Foreclosure sale occurred 9/08/04. Dinesh Patel (a third party) was the successful bidder at the sale with a bid of $5,500,000. In NC, there is a 10-day upset bid period, where anyone can bid 5% more than the last bid with a 5% deposit.OCM allowed upset period to lapse. Patel requested additional time to close the sale. An agreement has been reached and documented, in which Patel will make P&I payments in November (and December, if necessary), and has agreed to the $275,000 earnest money to be paid to Noteholder. This arrangement is now final and the $275,000 (as well as the first P&I pmt) have been received by Noteholder. 240000160 Transferred to Special Servicing due to Imminent Default; 5/24/02 explosion and fire caused by tenant destroyed 10 units and damaged approx. 40 others. Property is 100% vacant during repairs/renovation.Asbestos abatement issues resolved and major construction is progressing well, though slower than expected. Estimated completion date February 2004. Construction is being monitored on a weekly basis. Rental interruption insurance payments were paid through May 2003; Borrower is now making debt service from own funds. The Borrower has significant equity in the property and no payment default is anticipated. 245114324 The Collateral is currently under contract for $4.05mm with closing to occur no later than 12/31/04. The Buyer has deposited $100,000 non-refundable earnest money, there is no due diligence period.OCM received five offers for the Collateral by itself and five offers for the Collateral in a package with #245114322. The best offer came in at $4.05mm with Buyer to pay all franchise change-of-ownership (PIP) costs, plus $100k non-refundable earnest money and a quick close. 245114322 The Collateral is currently under contract for $3.6mm with closing to occur no later than 12/31/04. The Buyer has deposited $150,000 non-refundable earnest money, there is no due diligence period.OCM received two offers for the Collateral by itselfand five offers for the Collateral in a package with #245114324. The best offer came in at $3.6mm with Buyer to pay all franchise change-of-ownership (PIP) costs, plus $150k non-refundable earnest money and a quick close. 440000217 Orchard Plaza Shopping Center is a retail shopping center that consists of two single-story buildings and a total of 86,048 square feet. Property is currently 42.58% occupied, only vacant unit is the anchor space.Loan transferred on 11/18/03 after Borrow er requested a modification of the note terms on 11/13/03 due to the Anchor tenant seeking to have their lease rejected in Bankruptcy court.Counsel engaged week of 11/24/03 to file POC on behalf of Lender in Penn Traffic (BiLo) bankruptcy. Judge granted Penn Traffic the right to sell their interest in the lease on 12/18, but no sale occurred. Penn Traffic rejected the lease eff 1/25/04.AM inspected property on 1/14/04. Property was in good condition with no def. maint. noted. AM received executed Big Lots lease to bring occupancy to 100% (4/21/04). Big Lots opened 10/24/04, loan to be returned upon receipt of Nov payment plus SSexpenses. 240000258 HMH Associates, Inc., one of the three GP's for this loan (d/b/a HMH Management Company, d/b/a Lynnwood Manor Health Care Center), filed for voluntary Chapter 11 bankruptcy on 4/20/2004. New appraisal ($3,300,000 - 6/01/2004) received and accepted. Borr ower ceased making monthly loan payments on 8/1/2004. Operating/financial information requested by OCM was not provided. Notice of default sent 9/20/2004.Borrower provided delinquent property reporting information (financial/operating). Pastdue loan payments have been made and the loan is now paid current. Reporting information for the current period has been satisfied. 180000295 Collateral is a 157-unit apartment complex in Victoria, TX. Transferred to Special Servicing 9/11/03 due to Borrower's request for debt service relief for 1 year. Monetary default subsequently occurred in 9/03. Winstead Secrest engaged to represent 240000277 Please refer to Servicer Reports for comments as they are to lengthy to include. 245114268 he Subject Loan was transferred on September 8, 2003 due to inadequate Liability Insurance coverage. Insurance was forced placed from Sept 03-Oct 04 when Borrower was able to obtain sufficient coverage.The property's current occupancy is 94% and the most recent DSCR's approach 2.5x, which has held steady for 2 years. Updated appraisal is not warranted at this time. Loan to be returned to MS after 3 timely payments. Oct payment was the first. 245114181 Borrower did not provide adequate liability insurance coverage per loan documents ($4MM required in Sec. 1.4 of the Deed of Trust). The borrower's request for acceptance of a lesser amount was rejected. Loan transferred to Special Servicer 12/4/03. Force place coverage obtained by Primary-Servicer 12/17/03. Premium paid from funds held in the insurance escrow account. Notice of default sent to borrower 1/22/04. Inspection complete 2/19/04. Property in good condition (95% occupied). Appraisal reviewed and accepted $3. 17MM (3/02/2004).Borrower continues to make monthly loan payments. Borrower's proposed discounted payoff (including partial default interest/prepayment consideration) was rejected by OCM. Counter-proposal for loan modification has been made. The borrower has responded by increasing its offer in settlement of this matter. The Special Servicer is now considering the proposal. 240000390 ORIX documented a Deed in Lieu of foreclosure on the subject property on 7/19/04. Purchase offer of $1,912,500 from United Realty Companies has been accepted by ORIX and approved by the REO Committee. Offer provided for no Review Period with $100,000 har d day one and a 30 day closing. P & S executed November 16, 2004. Closing is scheduled for December 16, 2004. 195114158 ML transferred due to chronic slow pay and due to low DSCR; Borrower has maintained ML current; after review of operating statements determined that Borrower had been overstating expense which resulted in lower DSCR; after adjustments.License agreement wa s renewed w/o obtaining new tri-party agreement - in process of curing this deficiency. Counsel engaged to assist in documentation issues w/ tri-party agreement - Borrower working to resolve non-monetary defaults.Due to numerous non-monetary defaults an d inability of Borrower to cure several in a timely manner, Borrower attempting to refinance loan and payoff ML. A forbearance agreement has been negotiated and approved,which includes full payoff by 3/31/05 with waiver of default interestand prepayment premium. Document evidencing the agreement has been signed by the parties and the first two payments under the agreement has been received. 245114290 Loan Transferred due to monetary default. Borrower paid 7/1/04 and 8/1/04 monthly payments during September. Borrower indicated he was unable to make timely payments due to capital expenditures completed at the property, which costs ran over budget. Borrower stated he would make best efforts to bring the loan current in relation to monthly payments during October, but failed to do so. A new payment schedule was arranged with the Borrower that would bring the loan current by 12/15/04, but the Borrower has not complied. Legal Counsel has been obtained and a demand letter will be sent to the Borrower. Recent Inspection indicated that the property is in good condition. (1) Resolution Strategy Code 1 - Modification 2 - Foreclosure 3 - Bankruptcy 4 - Extension 5 - Note Sale 6 - DPO 7 - REO 8 - Resolved 9 - Pending Return to Master Servicer 10 - Deed in Lieu Of Foreclosure 11 - Full Payoff 12 - Reps and Warranties 13 - Other or TBD

Modified Loan Detail Loan Modification Description Number 440000022 240000148 Chapter 11 plan was confirmed. Loan was reinstated. Maturity date extened by one year. All attorney fees were reimbursed. Loan returned to Servicer as a corrected loan. 440000425 Prior borrower filed BK. Assumption/modification negotiated by BK court. Arrearage capitalized onto Prin Bal. Note reamortized and monthly payment increased.

FIRST UNION LEH BRO BANK OF AMER COM MOR PA TH CE SE 1998-C2 8-K