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KBRA Downgrades Four Ratings and Affirms All Other Ratings for BENCHMARK 2018-B3

20 Mar 2026   |   New York

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KBRA downgrades the ratings of four classes of certificates and affirms all other outstanding ratings for BENCHMARK 2018-B3, a $796.2 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction, which has exhibited an increase in estimated losses from K-LOCs compared to KBRA’s last rating changes in March 2025. The increase in estimated losses from K-LOCs was primarily driven by two loans, InterContinental San Francisco (5.3% of the pool) and 90 Hudson (3.8%). The InterContinental San Francisco loan has been current in payment since securitization; however, the collateral property has had operating deficits in excess of $4.5 million for two consecutive years,and KBRA estimates the loan could experience a loss given a default or transfer to special servicing. Additionally, since last review, the 90 Hudson loan transferred to the special servicer in July 2025, and the collateral property was placed in receivership after foreclosure was filed. Although we expect the timing of resolutions for K-LOCs to vary, estimated losses from specially serviced assets would impact the H-RR certificates and below while additional estimated losses from non-specially serviced assets, such as the InterContinental San Francisco, would impact the F-RR certificates and below, following the loans’ respective projected time to default and subsequent resolution timelines.

As of the March 2026 remittance period, there are two specially serviced assets (7.5%), both of which are in foreclosure. In addition, the non-securitized pari-passu note for one loan (4.4%) is reported as specially serviced; but the reporting for this transaction indicates the loan is non-specially serviced despite its 60 day delinquency status. KBRA identified 10 K-LOCs (38.0%), including the specially serviced assets. Of the K-LOCs, six (27.2%) have estimated losses. The K-LOCs are depicted in the table below:

Loss Given Default (000s) Loss Severity 1 6420 Wilshire OF $62,000 7.8% N C N Occupancy 07/05/2022 $8,800 14.2% 5A2 InterContinental San Francisco LO $42,091 5.3% N C N DSCR 03/20/2020 $24,039 57.1% 10A3 Rochester Hotel Portfolio LO $35,075 4.4% N C N Occupancy 10/04/2022 $8,138 23.2% 12A2 599 Broadway RT $35,000 4.4% N 60+ N Delinquent 02/20/2026 - - 15A2 315 West 36th Street OF $30,000 3.8% Y 90+ N Occupancy 04/27/2023 $25,419 84.7% 16A2B 90 Hudson OF $30,000 3.8% Y 60+ N Specially Serviced 04/23/2024 $21,436 71.5% 22A1 Oak Portfolio OF $21,523 2.7% N C N Recent Delinquency 01/03/2026 - - 24 Village on the Park Southgate MF $17,784 2.2% N C N Recent Delinquency 03/19/2024 $2,182 12.3% 26 Wade Green Crossing RT $14,851 1.9% N C N Occupancy 10/29/2024 - - 28 One Mill Run OF $13,856 1.7% N C N DSCR 06/25/2024 - - Total K-LOCs $302,181 38.0% $90,015 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. KBRA Estimated 2 K-LOCs Prosp. ID Loan Name Prop Type Current In- Trust Balance (000s) % of Deal Balance SS Loan Status Mod (Y/N) Primary K-LOC Reason K-LOC Date 1
Source: KBRA

Excluding the K-LOCs with estimated losses, the transaction's WA KLTV is 89.8%, compared to 87.9% at KBRA's last ratings change and 101.2% at securitization. The KDSC is 1.61x, compared to 1.63x at KBRA's last ratings change and 1.76x at securitization.

Details concerning the classes with rating changes are as follows:

  • Class E-RR to BB- (sf) from BB (sf)
  • Class F-RR to CCC (sf) from B (sf)
  • Class G-RR to CC (sf) from B- (sf)
  • Class H-RR to C (sf) from CCC (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.