KBRA Downgrades Seven Ratings and Affirms All Other Ratings for COMM 2018-COR3
6 Sep 2024 | New York
KBRA downgrades the ratings of seven classes of certificates and affirms all other outstanding ratings for COMM 2018-COR3, a $979.0 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction, which has exhibited an increase in estimated losses compared to KBRA’s last rating adjustments in September 2023. Additionally, the ratings consider the likelihood of interest shortfalls reaching higher in the capital structure as the servicer works through the resolutions of the transaction’s specially serviced assets.
As of the August 2024 remittance period, there are three specially serviced assets (13.7% of the pool balance), of which one (6.7%) is REO and two (7.0%) are over 90 days delinquent. KBRA identified 10 K-LOCs (35.3%), including the specially serviced assets. The K-LOCs include four (24.6%) of the top 10 loans, of which two (11.5%) have estimated losses:
- Hyatt @ Olive 8 (2nd-largest, 8.0% of the pool balance)
- Kingswood Center (3rd-largest, 6.7%, 48.3% estimated loss severity, REO)
- Grand Hyatt Seattle (6th-largest, 5.1%)
- 315 West 36th Street (7th-largest, 4.8%, 79.7%)
Four other K-LOCs (7.9%) have estimated losses:
- 240 East 54th Street (3.2%, 80.1%)
- 644 Broadway (2.2%, 43.8%)
- 2857 West 8th Street (1.5%, 21.7%)
- Fairfield Inn Charleston Airport (1.2%, 25.7%)
The remaining two K-LOCs, representing 2.7% of the pool balance, do not have estimated losses.
Excluding the K-LOCs with estimated losses, the transaction’s WA KLTV is 103.5%, compared to 105.8% KBRA’s last rating adjustments in September 2023 and 99.7% at securitization. The KDSC is 1.70x, compared to 1.76x at KBRA’s last rating adjustments and 1.94x at securitization.
Details concerning the classes with rating changes are as follows:
- Class B to A- (sf) from AA (sf)
- Class C to BB- (sf) from A- (sf)
- Class D to CCC (sf) from BB- (sf)
- Class E-RR to CC (sf) from B (sf)
- Class F-RR to C (sf) from CCC (sf)
- Class G-RR to C (sf) from CC (sf)
- Class X-D to CCC (sf) from BB- (sf)
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