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KBRA Downgrades Six Ratings, Affirms Seven Ratings, and Withdraws Two Ratings for WFCM 2016-LC24

4 Sep 2026   |   New York

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KBRA downgrades the ratings of six classes of certificates, withdraws the ratings of two classes, and affirms all other outstanding ratings of WFCM 2016-LC24, a $225.2 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction, which has exhibited a worsening in pool performance since KBRA's last ratings change in September 2025. The rating actions reflect KBRA's estimated losses and the resulting loss adjusted C/E levels and also take into account ongoing interest shortfalls that are affecting some of the certificates and the likelihood those shortfalls will persist.

As of the August 2026 remittance period, there are five specially serviced assets (57.0% of the pool balance), of which one (20.0%) is in foreclosure and one is REO (7.7%). KBRA identified 11 K-LOCs (78.9%), including the specially serviced assets. Of the K-LOCs, six (63.9%) have estimated losses. The K-LOCs are depicted in the table below:

K-LOCs Loss Given Default (000s) Loss Severity 4 1140 Avenue of the Americas OF 45,000 20.0% Y FCL N Foreclosure 08/31/2021 $44,055 97.9% 5 One Meridian OF 33,992 15.1% Y NP N Non-Performing Maturity Balloon 03/11/2024 $22,194 65.3% 7 Pinnacle II OF 27,000 12.0% Y NP N Non-Performing Maturity Balloon 05/04/2022 $13,650 50.6% 15 One & Two Corporate Plaza OF 17,330 7.7% Y REO N REO 03/05/2019 $10,133 58.5% 16 4100 Alpha Road OF 15,650 7.0% N C N Occupancy 08/04/2021 $4,075 26.0% 21 Century Springs Park OF 12,861 5.7% N NP N Non-Performing Maturity Balloon 09/04/2025 - - 40 Holiday Inn Hotel & Suites Beaufort LO 6,548 2.9% N C Y Prior SS 06/04/2020 - - 42 Holiday Inn Express Austin North LO 6,401 2.8% N C Y DSCR 12/02/2025 - - 55 Grove Park Center OF 4,963 2.2% Y NP N Non-Performing Maturity Balloon 03/09/2023 $591 11.9% 58 151 West Santa Clara MU 4,130 1.8% N NP N Non-Performing Maturity Balloon 08/26/2026 - - 61 College Square III RT 3,880 1.7% N NP N Non-Performing Maturity Balloon 08/26/2026 - - Total K-LOCs $177,756 78.9% $94,699 1. K-LOC Date is the date when the most recent K-LOC was initially determined. 2. Loss Given Default assumes a 100% probability of default (PD). KBRA may determine a lower PD when estimating losses to a transaction. Loan Status Mod (Y/N) Primary K-LOC Reason K-LOC Date 1 KBRA Estimated 2 Prosp. ID Loan Name Prop Type Current In- Trust Balance (000s) % of Deal Balance SS
Source: KBRA

Excluding the K-LOCs with estimated losses, the transaction's WA KLTV is 82.5%, compared to 81.5% at KBRA's last ratings change in September 2025 and 99.2% at securitization. The KDSC is 1.44x, compared to 2.02x at KBRA's last ratings change and 1.97x at securitization.

Details concerning the classes with ratings changes are as follows:

  • Class C to BB- (sf) from BBB (sf)
  • Class D to CC (sf) from BB- (sf)
  • Class E to C (sf) from B- (sf)
  • Class F to C (sf) from CC (sf)
  • Class X-D to CC (sf) from BB- (sf)
  • Class X-EF to C (sf) from CC (sf)

Details concerning the withdrawn ratings are as follows:

  • Class A-4 to WR from AAA (sf)
  • Class X-A to WR from AAA (sf)

To access ratings and relevant documents, click here.

Click here to view the report.

Related Publication

Methodologies

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

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.

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