**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, DC 20549**

 

----

 

**FORM 10-K**

 
| **(Mark  One)**                                                                                  | **ý****Annual Report pursuant to  Section 13 or 15(d) of  the Securities and Exchange Act of 1934** |   |
|--------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------|--------|
|                                                                                             |
| **for  fiscal year ended December 31, 2002**                                                     |
|                                                                                             |
| **or**                                                                                           |
|                                                                                             |
| **o****Transition Report  pursuant to Section 13 or 15(d)  of the Securities Exchange Act 1934** |

 
| **for  the transaction period from                     to** |
|--------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                             |
| **Commission  File Number:  33-97994**                                                                                                      |

 

----

 

**FIRST UNION COMMERCIAL MORTGAGESECURITIES, INC.**

**(InRespect of COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1997-C1)**

(Exact name ofregistrant as specified in its charter)

 

| **Delaware**                                                                |   | **56-1643598**                        |
|-----------------------------------------------------------------------------|--------|---------------------------------------|
| (State or other  jurisdiction  of incorporation or organization)            |   | (I.R.S. Employer  Identification No.) |
|                                                                        |
| **One First Union Center  Charlotte, North Carolina**                       |   | **28228-0600**                        |
| (Address of  Principal Executive Offices)                                   |   | Zip Code                              |
|                                                                        |
| **(704) 374-6828**                                                          |
| Registrant’s  telephone number, including area code                    |
|                                                                        |
| Securities registered pursuant to Section 12(b) of the Act:  **None.** |
|                                                                        |
| Securities registered pursuant to Section 12(g) of the Act:  **None.** |

 

Indicate by check markwhether the registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements for thepast 90 days.

 

Yes ý         No o

Indicate by check mark ifdisclosure of delinquent filers pursuant to Item 405 of Regulation S-K is notcontained herein, and will not be contained, to the best of the registrant’sknowledge, in definitive proxy or information statements incorporated byreference in Part III of this Form 10-K or any amendment to this Form 10-K. o  **NotApplicable**.

 

Indicate by check markwhether the registrant is an accelerated filer (as defined in Rule 12b-2 of theAct). Yeso No ý****

 

** **

Aggregate market value ofvoting stock held by non-affiliates of the registrant as of December 31, 2002.

** **

**NotApplicable**.

 

Number of shares ofcommon stock outstanding as of December 31, 2002.

 

**NotApplicable**.

 

Registrant has not beeninvolved in bankruptcy proceedings during the proceeding five years, and is notreporting as a corporate issuer.

 

The following documentsare incorporated by reference into this Form 10-K.

 

**None**.

 

 

 

----

 

 

FIRST UNIONCOMMERCIAL MORTGAGE SECURITIES, INC.

COMMERCIALMORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1997-C1

FORM 10-K

 

INDEX

 
| PART I.                                                                                                                                                                                                                       |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                          |
| Item 1. Business                                                                                                                                                                                                              |
| Item 2.  Properties                                                                                                                                                                                                           |
| Item  3. Legal Proceedings                                                                                                                                                                                                    |
| Item  4. Submission of Matters to a Vote of Security Holders                                                                                                                                                                  |
|                                                                                                                                                                                                                          |
| PART II.                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                          |
| Item  5. Market for Registrant’s Common Equity and Related Stockholder Matters                                                                                                                                           |
| Item 6. Selected  Financial Data                                                                                                                                                                                              |
| Item  7. Management’s Discussion and Analysis of Financial Condition and Results of  Operations                                                                                                                          |
| Item  8. Financial Statements and Supplementary Data                                                                                                                                                                          |
| Item  9. Changes In and Disagreements With Accountants on Accounting and Financial  Disclosure                                                                                                                                |
|                                                                                                                                                                                                                          |
| PART III.                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                          |
| Item  10. Directors and Executive Officers of the Registrant                                                                                                                                                                  |
| Item 11. Executive  Compensation                                                                                                                                                                                              |
| Item  12. Security Ownership of Certain Beneficial Owners and Management                                                                                                                                                      |
| Item  13. Certain Relationships and Related Transactions                                                                                                                                                                      |
| Item  14. Controls and Procedures                                                                                                                                                                                             |
|                                                                                                                                                                                                                          |
| PART IV.                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                          |
| Item 15.  Exhibits, Financial Statement Schedules and Reports on Form 8-K                                                                                                                                                     |
|                                                                                                                                                                                                                          |
| Supplemental  Information to be Furnished with Reports Filed Pursuant  to Section 15(d) of the Securities  Exchange Act of 1934 of Registrants Which Have Not Registered Securities  Pursuant to Section 12 of such Act. |
|                                                                                                                                                                                                                          |
| SIGNATURES                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                          |
| INDEX OF  EXHIBITS                                                                                                                                                                                                            |

 

2

----

 

**PART I**

 

Item 1.                    Business

 

ThisAnnual Report on Form 10-K is being filed on behalf of First Union CommercialMortgage Securities, Inc. (the “Registrant”) by U.S. Bank National Association(successor in interest to State Street Bank and Trust Company), solely in itscapacity as successor trustee (in such capacity, the “Trustee”) under thePooling Agreement hereinafter identified and with respect to the Registrant’sCommercial Mortgage Pass-Through Certificates, Series 1997-C1 (the“Certificates”).  The Certificates wereissued under a Pooling and Servicing Agreement dated as of May 1, 1997 (the“Pooling Agreement”) among the Registrant, as Depositor, Wachovia Bank,National Association (formerly known as First Union National Bank, and prior tothat, First Union National Bank of North Carolina), as master servicer (the“Master Servicer”), Criimi Mae Services Limited Partnership (“CMSLP”), asspecial servicer, (the “Special Servicer”) and State Street Bank and TrustCompany, as the initial trustee.

 

EffectiveDecember 31, 2002, U.S. Bank National Association acquired the corporate trustbusiness of State Street Bank and Trust Company, and became the automaticsuccessor trustee under Section 8.09 of the Pooling Agreement.  On or about April 1, 2002, Wachovia Bankbecame the surviving entity and successor Master Servicer under the PoolingAgreement, following the merger between Wachovia Bank National Association, andFirst Union National Bank.

 

Capitalizedterms used herein and not otherwise defined shall have the respective meaningsascribed to such terms in the Pooling Agreement.

 

Certainof the information contained in the Annual Report on Form 10-K has beensupplied to the Trustee by third parties without independent review orinvestigation by the Trustee and no representation or warranty of any kind ismade by the Trustee with respect to such information.

 

Theinformation called for by this item is omitted as it is not applicable to theTrust Fund.  As used in this AnnualReport on Form 10-K, “omitted” means that the response to the referenced itemis omitted in reliance on the procedures outlined in numerous no-action lettersissued by the Securities and Exchange Commission’s Staff with respect tosubstantially similar trusts or certificates.

 

Item 2.                    Properties

 

Informationregarding the mortgaged properties securing the Mortgage Loans has been setforth in the Prospectus Supplement relating to the Certificates filed with theCommission.  The Trust Fund createdunder the Pooling Agreement has or will acquire title to real estate only upondefault of the related mortgages under the Mortgage Loans.  During the period covered by this report,the Trust Fund did not acquire any mortgage property in connection with theforeclosure of a defaulted Mortgage Loans or otherwise.

 

TheAnnual Statement as to Compliance of Wachovia Bank, National Association, asMaster Servicer is annexed hereto as Exhibit 15(a)(1)(i).  The Annual Servicing Report of KPMG LLP, an

 

3

----

 

independentpublic accountant, with respect to Wachovia Bank, National Association as theMaster Servicer required to be delivered under the Pooling Agreement is annexedhereto as Exhibit 15(a)(1)(ii).

 

Thecertification from First Union Commercial Mortgage Securities, Inc., asDepositor, required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,is annexed hereto as Exhibit 15(a)(1)(iii).

 

TheAnnual Statement as to Compliance of CMSLP as the Special Servicer requiredunder the Pooling Agreement is annexed hereto as Exhibit 15(a)(1)(iv).  The Annual Independent Public Accountant’sServicing Report of Ernst & Young LLP, an independent public accountant,with respect to CMSLP as the Special Servicer required to be delivered underthe Pooling Agreement is annexed hereto as Exhibit 15(a)(1)(v).

 

Item 3.    Legal Proceedings

 

TheRegistrant knows of no material pending legal proceedings involving either of(i) the Mortgage Properties or (ii) to the extent related to the Trust Fund,the Registrant, the Master Servicer, the Special Servicer, or the Trustee, ineach case, with respect to the Trust Fund other than ordinary routinelitigation, if any, incidental to the Trustee’s, the Master Servicer’s, theSpecial Servicer’s, or the Registrant’s duties under the Pooling Agreement andnot material when taken as a whole.

 

Item4.    Submission of Matters to a Voteof Security Holders

 

Nomatters were submitted to a vote or consent of the holders of the Certificatesduring the period covered by this report.

 

**PART II**

 

Item5.                    Market for theRegistrant’s Common Equity and Related Stockholder Matters

 

Presently,there is no established trading market for the Certificates known to theRegistrant.  As of December 31, 2002,there are an aggregate of 108 registered holders of all Classes of theRegistrant’s Commercial Mortgage Pass-Through Certificates Series, 1997-C1,including direct participants of the Depository Trust Company (“DTC”) butexcluding (for all classes other than the Class F Certificates) Cede & Co.,DTC’s nominee.  The computation of theapproximate number of holders is based in part upon the number of individualparticipants in a security position listings provided by DTC.

 

Informationas to distributions to Certificateholders have been provided in theRegistrant’s monthly Form 8-K filings with respect to the Certificates.

 

Item6.                    SelectedFinancial Data

 

Omitted.

 

4

----

 

Item7.                    Management’sDiscussion and Analysis of Financial Condition and Results of Operations

 

Omitted.

 

Item8.                    FinancialStatements and Supplementary Data

 

Omitted.

 

Item9.                    Changes In andDisagreements with Accountants on Accounting and Financial Disclosure

 

Duringthe period covered by this report, the Special Servicer engaged KPMG LLP as itsindependent public accountant with respect to its servicing responsibilitiesunder the Pooling Agreement.  ArthurAnderson LLP served as the independent public accountant for the SpecialServicer prior to KPMG LLP.  TheRegistrant knows of no other changes or disagreements with accountants onaccounting and financial disclosure with respect to the Trust Fund or theCertificates.

 

**PART III**

 

Item10.                  Directors andExecutive Officers of the Registrant

 

Omitted.

 

Item11.                  ExecutiveCompensation

 

Omitted.

 

Item12.                  Security Ownershipof Certain Beneficial Owners and Management

 

(a)           The Registrant is responding to thisitem by providing information with respect to the security ownership of certainowners of the Certificates, which information is annexed hereto as Exhibit 99.1

 

(b)           Omitted.

 

(c)           As of December 31, 2002, the Class KCertificates constitute the “Controlling Class” of Certificates within themeaning and bearing the rights and limitations set forth in the PoolingAgreement, including without limitation the right to designate an entity toserve as Special Servicer under the Pooling Agreement and to advise the SpecialServicer with respect to certain actions enumerated in the PoolingAgreement.  Reference is hereby made inall respects to the Pooling Agreement for a complete description of the rightsand limitations of the Controlling Class. The Registrant has been informed that the records of the Trustee reflectthat the registered holder of the Class K Certificates is LaSalle National Bankas Trustee for Criimi Mae Series 1998-C1.

 

5

----

 

Item13.                  CertainRelationships and Related Transactions

 

NotApplicable.

 

 

 
| Item 14.                              |   | Controls and Procedures |
|---------------------------------------|--------|-------------------------|
|                                  |   |                    |
| Not Applicable (Asset-Backed Issuer). |

 

**PART IV**

 

Item 15.                  Exhibits, Financial Statement Schedules and Reportson Form 8-K

 

(a)(1)**FinancialStatements**

 

(i)  TheStatement as to Compliance to be delivered by Wachovia Bank, National Associationas Master Servicer under the Pooling Agreement is annexed hereto as Exhibit14(a)(1)(i).

 

(ii)  The Annual Servicing Report of KPMG LLP, anindependent public accountant relating to master servicing by Wachovia Bank,National Association is annexed hereto as Exhibit 14(a)(1)(ii).

 

(iii)  The certification from First UnionCommercial Mortgage Securities, Inc., as Depositor, required pursuant toSection 302 of the Sarbanes-Oxley Act of 2002, is annexed hereto as Exhibit14(a)(1)(iii).

 

(iv)  The Annual Statement as to Compliance byCMSLP as Special Servicer required pursuant to the Pooling Agreement is annexedhereto as Exhibit 14(a)(1)(iv).

 

(v)  The Annual Independent Accountant’sServicing Report of Ernst & Young LLP, an independent public accountant,with respect to CMSLP as Special Servicer is annexed hereto as Exhibit14(a)(1)(v).

 

(a)(2) **FinancialStatement Schedules**

 

Omitted.

 

(a)(3) **Exhibits**

 

Unless otherwiseindicated, the following exhibits required by Item 601 of Regulation S-K andpreviously furnished to the Commission as exhibits to a Report on Form 8-K, areincorporated into this Form 10-K by reference:

 

4.                                       Poolingand Servicing Agreement dated as of May 1, 1997, by and among First UnionCommercial Mortgage Securities, Inc., as depositor, First Union National Bankof North Carolina as Master Servicer, Criimi Mae Services Limited Partnershipas Special Servicer, and State Street Bank and Trust Company, as Trustee.

 

6

----

 

99.1*                    SecurityOwnership of Certain Beneficial Owners.

 

(b)                     Thefollowing Reports on Form 8-K were filed with the Commission by or on behalf ofthe Registrant with respect to the Certificates during the last three months ofthe period covered by this report:

 

Report on Form 8-Kdated October 18, 2002, reporting items 5 and 7.

 

Report on Form 8-Kdated November 18, 2002, reporting items 5 and 7.

 

Report on Form 8-Kdated December 18, 2002, reporting items 5 and 7.

 

----

*  Filed herewith

 

 

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTSFILED PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 OFREGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF SUCHACT.

 

The Registrant has notsent an annual report or proxy material to the holders of itsCertificates.  The Registrant will notbe sending an annual report or proxy materials to the holders of itsCertificates subsequent to the filing of this Form 10-K.

 

7

----

 

**SIGNATURES**

 

Pursuant to therequirements of the Securities Exchange Act of 1934, the Registrant has dulycaused this report to be signed on its behalf by the undersigned, thereuntoduly authorized.

 

 
|                        | FIRST UNION COMMERCIAL MORTGAGE  SECURITIES, INC. (In Respect of its COMMERCIAL  MORTGAGE PASS-THROUGH CERTIFICATES,  SERIES 1997-C1) |
|-----------------------------|---------------------------------------------------------------------------------------------------------------------------------------|
|                        |                                                                                                                                  |
| Dated:  March 31, 2003 |                                                                                                                                  | By:    U.S.  Bank National Association (successor in interest to State Street Bank and  Trust Company), solely in its capacity as Trustee of the Trust Fund for the  Registrant’s Commercial Mortgage Pass-Through Certificates, Series 1997-C1  and not individually on behalf of the Registrant |
|                        |                                                                                                                                  |   |
|                        |                                                                                                                                  | By: | /s/ Peter A. Mitrano |   |
|                        |                                                                                                                                  |   | Peter A. Mitrano |   |
|                        |                                                                                                                                  | Title: Assistant Vice President |

 

8

----

 

**INDEX OF EXHIBITS**

 

**DESCRIPTION**

 
| 15(a)(1)(i)   |   | Annual Statement as to  Compliance by Wachovia Bank, National Association as Master Servicer.                                                                         |
|---------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          |   |                                                                                                                                                                  |
| 15(a)(1)(ii)  |   | Annual Independent  Accountant’s Report of KPMG LLP, an independent public accountant, with  respect to master servicing by Wachovia Bank, National Association. |
|          |   |                                                                                                                                                                  |
| 15(a)(1)(iii) |   | Certification from  First Union Commercial Mortgage Securities, Inc., under Section 302 of the  Sarbanes-Oxley Act of 2002.                                           |
|          |   |                                                                                                                                                                  |
| 15(a)(1)(iv)  |   | Annual Statement as to  Compliance by CMSLP, as Special Servicer.                                                                                                     |
|          |   |                                                                                                                                                                  |
| 15(a)(1)(v)   |   | Annual Independent  Accountant’s Servicing Report of Ernst & Young LLP, with respect to  special servicing by CMSLP.                                         |
|          |   |                                                                                                                                                                  |
| 99.1          |   | Security Ownership of  Certain Beneficial Owners (with original principal balances).                                                                                  |

 

9

----