KBRA Downgrades Three Ratings and Affirms All Other Ratings for CGCMT 2016-GC37
5 Mar 2025 | New York
KBRA downgrades the ratings of three classes of certificates and affirms all other outstanding ratings for CGCMT 2016-GC37, a $526.9 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction, which has exhibited a worsening pool performance since KBRA's last ratings change in March 2021. The rating actions also reflect KBRA’s estimated losses for eight K-LOCs (33.3%) and the resulting loss adjusted C/E levels.
As of the February 2025 remittance period, there is one specially serviced loan. KBRA identified eight K-LOCs (33.3%), of which five (26.4%) have estimated losses. Four of the five loans with losses are in the Top Ten.
KBRA identified eight K-LOCs (33.3%). These include:
Five of the top 10 loans (24.9%), four of which have estimated losses:
- 79 Madison Avenue (2nd largest, 7.6% of the pool balance, 17.7% estimated loss severity)
- Hotel on Rivington (4th largest, 6.5%, 32.7%)
- West LA Office (6th largest, 6.1%, 28.2%)
- 5 Penn Plaza (7th largest, 4.7%, 19.2%)
- Park Place (8th largest, 3.4%).
The remaining three K-LOCs do not have estimated losses and represent 7.0% of the pool balance.
Excluding the K-LOCs with an estimated loss, the transaction’s WA KLTV is 86.7%, compared to 102.7% at last review, 110.3% at KBRA’s last ratings change and 103.5% at securitization. The KDSC is 1.63x, compared to 1.64x at last review, 1.44x at KBRA’s last ratings change and 1.59x at securitization.
Details concerning the classes with ratings changes are as follows:
- Class E to B- (sf) from BB (sf)
- Class F to CCC (sf) from B- (sf)
- Class G to CC (sf) from CCC (sf)
To access ratings and relevant documents, click here.
Click here to view the report.