KBRA Affirms All Ratings for DBJPM 2016-SFC

KBRA affirms all outstanding ratings for DBJPM 2016-SFC, a CMBS SASB transaction. The affirmations follow a surveillance review of the transaction which has experienced a further decline in KBRA value after the collateral asset, which was 100% vacant as of January 2026, was taken back by the lender at a foreclosure auction in November 2025. KBRA previously downgraded the ratings of all certificates following a surveillance review of the transaction in February 2025 based on a continued decline in performance along with interest shortfalls impacting all rated classes. The magnitude of the value change does not warrant rating changes at this time.

The collateral property, Westfield San Francisco Centre (recently rebranded as Emporium Centre San Francisco), is a 1.1 million sf portion of a 1.4 million sf mixed-use retail property in downtown San Francisco. It is located between Market Street and Mission Street to the north and south, and Fourth and Fifth Streets to the east and west. The fee simple interest consists of retail and office space in the Emporium building totaling 608,321 sf, while the leasehold interest is represented by the San Francisco Centre portion of the property, a 186,200-sf retail space that is subject to a ground lease that expires in 2043. At issuance, the trust collateral was a $306.9 million portion of a $558.0 million whole mortgage loan that was composed of eight senior A notes totaling $182.0 million and four subordinate B notes totaling $124.9 million. The remaining 16 senior A notes totaling $251.1 million were not trust collateral.

The loan became specially serviced in July 2023 following the borrower’s failure to remit monthly debt service payments. The asset has faced significant performance deterioration driven by declining occupancy, tenant departures—including anchor-related challenges—and broader weakness in the San Francisco retail and office markets.

According to the February remittance, the trust collateral has an ARA of $268.5 million, and there are outstanding advances of $15.0 million and cumulative interest shortfalls of $19.6 million. The loan was deemed non-recoverable in March 2025 and none of the rated classes of certificates have received monthly interest distributions since April 2025. The servicer recently reported an updated appraised value of $195.0 million ($245 per sf) as of July 2025. However, according to news reports, the lender was the successful bidder at the foreclosure sale in November 2025 with a credit bid between $133.0 and $134.0 million. News reports also indicate that CBRE is marketing the property for sale, positioning it as a major repositioning or redevelopment opportunity in downtown San Francisco. At least four San Francisco-based developers, including TMG Partners, Prado Group, Presidio Bay Ventures and the San Francisco Recovery Fund, have evaluated the property, which is expected to seek offers of at least $100.0 million. According to the servicer, a closing is expected in late 2Q or 3Q 2026.

KBRA’s analysis of the asset resulted in a value of $53.0 million ($67 per sf) which represents 40.0% of the $133.0 million reported foreclosure sale price. Based on our value, the trust will incur significant principal losses when the collateral property is liquidated. KBRA maintains the asset’s K-LOC designation and KPO of Underperform.

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 which will be dependent on the value of the asset and the disposition of the loan. The assessment will consider the expected and actual losses, as well as the magnitude and extent of accrued interest shortfalls on the certificates. 

Details for the classes with rating affirmations are as follows:

To access ratings and relevant documents, click here.

Related Publication

Methodologies