Press Release|CMBS

KBRA Downgrades Five Ratings, Affirms Four Ratings, and Removes Eight Ratings from Watch Downgrade for JPMBB 2015-C27

25 Aug 2025 | New York

KBRA downgrades five ratings and affirms all other outstanding ratings for JPMBB 2015-C27, a $246.0 million CMBS conduit transaction that has five assets remaining in the underlying mortgage pool, of which four (95.7% of the pool balance) are specially serviced. Simultaneously, KBRA removes eight ratings from Watch Downgrade (DN), where they were placed on May 27, 2025. The rating actions are driven by an increase in KBRA's estimated losses for four assets (95.7% of the pool balance). We also considered the magnitude, recoverability and likelihood of continued interest shortfalls across the capital structure as the special servicer works to resolve the non-performing assets.

As of the August 2025 remittance period, the transaction has five loans, four (95.7%) of which have been identified as a K-LOC, including three loans (45.0%) in foreclosure and one specially serviced loan (44.7%). The details of the K-LOCs are outlined below.

The Club Row Building (largest, 44.7%, K-LOC, Specially Serviced, Current)

The loan is collateralized by a 365,819-sf, Class-B, office/retail building located on West 44th Street in Midtown Manhattan. The property offers 338,957 sf of office, 14,295 sf of ground floor retail, and 12,389 sf of storage space.
KBRA maintains the loan's K-LOC designation and KPO of Underperform based on its status with the special servicer amid a decline in collateral performance. The loan transferred to the special servicer after it was not paid off at maturity in January 2025. The special servicer conditionally approved a modification of the debt in May 2025.
The servicer-reported occupancies and DSCs are: 61.0% / 1.32x (FY 2024), 70.0% / 1.52x (FY 2023); at closing these were 96.1% / 1.58x. KBRA's analysis resulted in an estimated loss of $72.8 million (47.0% estimated loss severity) on the whole loan balance of $155.0 million. The loss is based on a KBRA value of $84.0 million ($226 per sf), which is derived using a stabilized KNCF of $8.1 million and a capitalization rate of 8.72%.

The Branson at Fifth (2nd largest, 29.7%, K-LOC, Specially Serviced, Foreclosure)

The loan is collateralized by a 10-story, 31-unit mid-rise multifamily building with 14,881 sf of retail space located on West 55th Street at Fifth Avenue in the Midtown West neighborhood of Manhattan.
KBRA maintains the loan's K-LOC designation and KPO of Underperform due to its foreclosure status and previous loan modifications. The loan was originally transferred to the special servicer in July 2019 when the borrower terminated a lease without lender consent and failed to provide a required $2.0 million letter of credit into the rollover reserve. The borrower and special servicer executed the first loan modification agreement in January 2020, which among other terms, extended the loan’s interest-only period through maturity in exchange for additional funding of rollover reserves and certain borrower guarantees. A second loan modification was executed in January 2021, which included terms such as an interest rate reduction with an accrual feature and waiver of prepayment premiums in exchange for additional guarantees and cooperation covenants. The borrower was unable to keep the loan current after the second modification, and the loan was transferred back to the special servicer in September 2021 when it became 60+ days delinquent. Special servicer commentary stated that the borrower has proposed a third modification and maturity extension, which would include a new equity component and a structure to collect the balance of an $11.0 million payment guaranty provided in the prior modification.
The servicer-reported occupancies and DSCs are: 81.0% / 0.08x (YTD June 2023), 51.0% / -0.33x (FY 2020); at closing these were 100% / 1.22x. An appraisal dated September 2024 valued the property at $37.5 million ($634 per sf), which is 68.5% below the $119.0 million ($2,012 per sf) value at issuance. As a result, the asset carries an ARA of $50.8 million, resulting in a cumulative ASER of $4.4 million. KBRA's analysis resulted in an estimated loss of $47.3 million (64.8% estimated loss severity). The loss is based on a KBRA liquidation value of $33.6 million ($568 per sf).

717 14th Street (3rd largest, 15.1%, K-LOC, Specially Serviced, Foreclosure)

The loan is collateralized by a 120,215 sf, Class-B office building located in Washington, D.C. The property is subject to a ground lease between the borrower and a third party that expires in March 2057, with two 10-year renewal options.
KBRA identified the loan as a K-LOC and maintains its KPO of Underperform based on its foreclosure status. The loan was transferred to the special servicer in February 2023 for imminent monetary default after the borrower indicated that it would not be able to fund cash flow shortfalls. The loan was determined by the servicer to be non-recoverable in June 2024. Foreclosure and workout discussions remain ongoing, and Lincoln Property Company has been appointed as receiver. Cash management was activated and there is approximately $161,000 in leasing reserves as of August 2025.
The servicer-reported occupancies and DSCs are: 64.0% / 0.95x (FY 2022), 80.0% / 1.45x (FY 2021); at closing these were 100% / 1.36x. An appraisal dated December 2024 valued the property at $9.6 million ($84 per sf), which is 82.9% below the $56.0 million ($466 per sf) value at issuance. The asset carries an ARA of $32.7 million, resulting in a cumulative ASER of $411,000. KBRA's analysis resulted in an estimated loss of $32.7 million (88.1% estimated loss severity). The loss is based on a KBRA value of $7.2 million ($63 per sf), which is 75% of the December 2024 appraisal value.

Blue Lake Center (4th largest, 6.3%, K-LOC, Specially Serviced, Foreclosure)

The loan is collateralized by a 166,779 sf office building located in Birmingham, Alabama, approximately 10 miles from the CBD.
KBRA maintains the loan's K-LOC designation and KPO of Underperform based on its foreclosure status. The loan transferred to the special servicer after failing off to pay off at maturity in December 2024. The property faced a decline in performance stemming from a drop in occupancy, which was reported at 62% in December 2024. The special servicer has retained counsel to file for foreclosure and/or receivership while discussing workout alternatives with the borrower.
The servicer-reported occupancies and DSCs are: 62.0% / 1.55x (FY 2024), 74.0% / 1.14x (FY 2023); at closing these were 85.6% / 1.40x. An appraisal dated February 2025 valued the property at $15.8 million ($95 per sf), which is 31.2% below the $23.0 million ($138 per sf) value at issuance. The asset carries an ARA of $1.6 million. KBRA's analysis resulted in an estimated loss of $6.7 million (43.3% estimated loss severity). The loss is based on a KBRA value of $9.4 million ($56 per sf), which is derived using KNCF of $912,000 and a capitalization rate of 9.75%.

Details concerning the classes with a rating adjustment is as follows:

Class A-S to BB (sf) from AA (sf) DN
Class B to B (sf) from BBB (sf) DN
Class EC to CCC (sf) from B (sf) DN
Class C to CCC (sf) from B (sf) DN
Class D to C (sf) from CC (sf) DN

KBRA affirms the following ratings, including three classes that were removed from Watch Downgrade:

Class A-4 at AAA (sf)
Class E to C (sf) from C (sf) DN
Class F to C (sf) from C (sf) DN
Class G to C (sf) from C (sf) DN

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.

KBRA Downgrades Five Ratings, Affirms Four Ratings, and Removes Eight Ratings from Watch Downgrade for JPMBB 2015-C27

Rating Sensitivities

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