KBRA Downgrades One Rating and Affirms All Other Ratings for COMM 2015-LC21
30 Apr 2026 | New York
KBRA downgrades the rating of one class and affirms all other outstanding ratings for COMM 2015-LC21. The conduit transaction has been reduced to seven assets and a balance of $163.9 million from 101 loans and $1.3 billion at securitization. The rating actions are based on KBRA's expected resolutions of the remaining loans and our estimated losses total $35.5 million (which, if realized, would impact class F and below).
Six of the remaining assets (80.5% of the pool balance) have been identified as KBRA Loans of Concern (K-LOC), of which five (76.7%) have estimated losses. The remaining loan (19.5%) was structured with an anticipated repayment date (ARD) with a final maturity in January 2030 and is current on payments. The details of the K-LOCs with estimated losses are outlined below.
Meridian at Brentwood ($35.4 million, 21.6%, Specially Serviced, Non-Performing Matured Balloon)
- The loan is collateralized by a 242,235 sf, Class-A office complex located in Brentwood, Missouri, approximately eight miles west of the St. Louis CBD. The property was developed on a 5.5-acre site by the sponsor in 2008.
- The loan initially transferred to special servicing in June 2023 because of the borrower's non-compliance with cash management following a decrease in occupancy. Cash management was established, occupancy was increased and the loan was briefly returned to the master servicer. The loan transferred back to the special servicer in January 2026 for maturity default. Occupancy is expected to decline to 60.6% as BJC Health System did not renew a 95,487 sf space at its December 2025 lease expiration. The special servicer is dual-tracking modification discussions and enforcement of remedies.
- A February 2026 appraisal valued the property at $33.5 million ($138 per sf), which is 42.0% below the appraised value at issuance of $57.8 million ($239 per sf). An ARA of $4.2 million was assigned in April 2026 and the cumulative ASER amount is $15,189. KBRA’s analysis resulted in an estimated loss of $5.9 million (16.6% estimated loss severity). The loss is based on KBRA's liquidation value of $30.2 million ($124 per sf), which is 90% of the appraisal, and projected total exposure of $36.0 million.
Santa Monica Clock Tower ($26.7 million, 16.3%, Specially Serviced, Non-Performing Matured Balloon)
- The collateral is a 54,471 sf, Class-A office building located in downtown Santa Monica, California, approximately 16 miles west of the Los Angeles CBD. The development is comprised of a 12-story building that features a clock tower and a full-service restaurant on the ground floor. The subject property has been designated a historical landmark by the City of Santa Monica.
- The loan transferred to special servicing in May 2025 for maturity default. According to special servicer commentary, the borrower has indicated a willingness to return the property to the lender, and a receiver was appointed in November 2025 to oversee operations while the special servicer evaluates resolution options, including a potential loan assumption.
- The servicer reported an occupancy and DSC of 42.9% and -1.60x as of YTD August 2025. A July 2025 appraisal valued the property at $27.4 million ($503 per sf), which is 44.1% below the appraised value at issuance of $49.0 million ($900 per sf). KBRA’s analysis resulted in an estimated loss of $11.6 million (43.6% estimated loss severity). The loss is based on KBRA's liquidation value of $16.5 million ($303 per sf) and projected total exposure of $28.2 million. The value considers an income capitalization approach, using a stabilized KNCF of $1.6 million, a capitalization rate of 8.75%, and a downward adjustment to account for TI/LC costs and income lost during the stabilization period.
26-34 South State Street ($24.0 million, 14.6%, Specially Serviced, REO)
- The collateral is an eight-story, 96,600 sf single-tenant retail building located within the East Loop district of downtown Chicago, Illinois. The property is 100% leased to Footaction, pursuant to a 15-year lease that commenced in April 2015 and expires in May 2030. The tenant operates its Foot Locker and Kids Foot Locker brands out of the adjacent first floor units and utilizes the second and third floors for stock rooms and special events. The remaining higher floors are not utilized or built out.
- The loan transferred to special servicing in May 2025 for maturity default. The special servicer is negotiating a deed-in-lieu agreement with the borrower, which was expected to be completed in Q2 2026. However, the asset has been reported as REO in each remittance since September 2025.
- The servicer reported an occupancy and DSC of 100% and 2.34x as of YTD September 2025. A July 2025 appraisal valued the property at $23.4 million ($242 per sf), which is 34.7% below the appraised value at issuance of $35.9 million ($371 per sf). An ARA of $1.3 million was assigned in October 2025 and the cumulative ASER amount is $35,322.
- KBRA’s analysis resulted in an estimated loss of $8.9 million (37.2% estimated loss severity). The loss is based on KBRA's liquidation value of $17.1 million ($177 per sf) and projected total exposure of $26.0 million. The value considers a distressed non-stabilized disposition of the asset.
Delaware Corporate Center I & II ($22.9 million, 14.0%, Specially Serviced, Performing Matured Balloon)
- The loan is collateralized by a 200,275 sf, Class-A office complex located in Wilmington, Delaware, approximately seven miles north of the city’s CBD.
- The loan was initially with the special servicer from March 2022 to June 2023 due to non-compliance with cash management following a trigger event. The loan most recently transferred to the special servicer in March 2025 for imminent maturity default. Occupancy initially declined after the largest tenant, E.I. du Pont de Nemours and Company (28.2% of base rent, 26.5% of collateral sf), vacated at its lease expiration in December 2022. Occupancy was 89.2% pursuant to a September 2025 rent roll, compared to 73.8% at last review and 100% at closing. The borrower was granted a forbearance through May 2026 with a one-year additional extension option upon the satisfaction of certain criteria. According to special servicer commentary, a resolution via asset disposition or title transfer is anticipated in Q2 2026.
- A July 2025 appraisal valued the property at $19.2 million ($96 per sf), which is 51.1% below the appraised value at issuance of $39.3 million ($196 per sf). An ARA of $4.5 million was assigned in September 2025. KBRA’s analysis resulted in an estimated loss of $4.7 million (20.6% estimated loss severity). The loss is based on KBRA's liquidation value of $18.9 million ($94 per sf) and projected total exposure of $23.6 million. The value considers a distressed non-stabilized disposition of the asset.
36 South State Street ($16.8 million, 10.3%, Specially Serviced, Foreclosure)
- The loan is collateralized by an 18,950 sf, multi-tenant retail condominium located in the Chicago CBD. The asset comprises three retail spaces occupied by Verizon Wireless, Five Below, and T-Mobile, and represents the ground and partial second floor of a larger mixed-use building.
- The loan transferred to special servicing in June 2025 for maturity default and a foreclosure complaint was filed in March 2026. Verizon Wireless and T-Mobile represent 59.1% of base rent and each have 2028 lease expirations.
- The servicer reported an occupancy and DSC of 100% and 1.84x as of YTD September 2025. A July 2025 appraisal valued the property at $13.5 million ($696 per sf), which is 53.2% below the appraised value at issuance of $25.9 million ($1,332 per sf). An ARA of $4.0 million was assigned in October 2025 and the cumulative ASER amount is $29,267.
- KBRA’s analysis resulted in an estimated loss of $4.3 million (25.6% estimated loss severity). The loss is based on KBRA's liquidation value of $13.2 million ($702 per sf) and projected total exposure of $17.5 million. The value considers an income capitalization approach, using a KNCF of $1.1 million and a capitalization rate of 8.25%.
Details regarding the class with a ratings change are as follows:
- Class D to BB- (sf) from BBB- (sf)
Details concerning the ratings affirmations are as follows:
- Class C at A- (sf)
- Class E at CCC (sf)
- Class F at CC (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.