Press Release|CMBS

KBRA Downgrades Six Ratings and Affirms All Other Ratings for CGCMT 2016-P3

27 Mar 2024   |   New York


KBRA downgrades the ratings of six classes of certificates and affirms all other outstanding ratings for CGCMT 2016-P3, a $635.1 million CMBS conduit transaction. Simultaneously, four classes have been removed from Watch Downgrade (DN), where they were placed on December 20, 2023. The rating actions follow a surveillance review of the transaction, which has exhibited a worsening in overall pool performance compared to KBRA's last review including a high concentration of assets that have been identified as K-LOCs (48.2%). The rating actions also reflect an increase in estimated losses since KBRA's last review.

As of the March 2024 remittance period, there is one specially serviced asset (7.9%). KBRA identified nine K-LOCs (48.2% of the pool balance). Of the K-LOCs, three have estimated losses (20.4%). The K-LOCs include:

Six of the top 10 loans (42.9%)

  • Empire Mall (largest, 9.3% of the pool balance, 37.9% estimated loss severity)
  • Marriott Midwest Portfolio (2nd largest, 8.7%)
  • Nyack College NYC (3rd largest, 7.9%, 46.5%)
  • 79 Madison Avenue (4th largest, 7.1%)
  • 5 Penn Plaza (5th largest, 6.6%)
  • 600 Broadway (10th largest, 3.3%)

One other K-LOC has an estimated loss:

  • The Round (3.2%, 38.8%)

The remaining two K-LOCs do not have estimated losses and represent 2.1% of the pool balance.

Excluding the K-LOCs with estimated losses, the transaction’s WA KLTV is 109.7%, compared to 105.2% at KBRA's last ratings change and 100.0% at securitization. The KDSC is 1.48x, compared to 1.52x at KBRA's last ratings change and 1.70x at securitization.

Details concerning the classes with ratings changes are as follows:

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

To access rating and relevant documents, click here.

Click here to view the report.

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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

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency 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 by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

Doc ID: 1003639

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