Press Release|CMBS
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KBRA Downgrades Four Ratings of CD 2016-CD2 to D (sf) Following Realization of Principal Losses

22 Sep 2025   |   New York

Contacts

KBRA downgrades the ratings of the E, F, X-E and X-F certificates to D (sf) from C(sf) for CD 2016-CD2, a $775.9 million CMBS conduit transaction, following realized losses incurred from the resolution of the 229 West 43rd Street Retail Condo REO asset (originally 3rd largest, $75.0 million loan balance at issuance) as reflected in the September 2025 remittance report. The asset, a 248,457-square-foot retail condominium located within an 18-story office building in New York City’s Times Square, was liquidated on August 12, 2025, for $28.0 million, resulting in a full loss on the $285.0 million whole loan, reflecting a loss severity of about 101%. A December 2024 appraisal valued the property at $48.0 million ($193 per sf), representing a 46.7% decline from its March 2024 appraisal of $90.0 million ($362 per sf) and an 89.8% decline from its issuance value of $470.0 million ($1,892 per sf).

According to the September 2025 remittance report, cumulative principal losses on the transaction totaled $75.5 million, including non-recoverable advances tied to the REO asset. Classes F and G have been reduced to zero and the realized losses have resulted in the principal balance of Class E being reduced by $27.2 million (97.1% of the original certificate balance).

KBRA's other outstanding ratings are unchanged at this time.

Details concerning the classes with a rating change are as follows:

  • Class E to D (sf) from C (sf)
  • Class F to D (sf) from C (sf)
  • Class X-E to D (sf) from C (sf)
  • Class X-F to D (sf) from C (sf)

Rating Sensitivities

Future rating actions will be dependent upon the ongoing assessment of the timing and likelihood of ultimate payment of principal and accrued interest on the rated certificates. The assessment will consider the expected and actual losses on the remaining assets in the transaction, as well as, the magnitude and extent of interest shortfalls, if any, on the certificates.

To access ratings and relevant documents, click here.

Related Publications

Methodologies

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1011344