KBRA Downgrades Two Ratings of CD 2017-CD3 to D (sf) Following Realization of Principal Losses
4 Nov 2025 | New York
KBRA downgrades the ratings of the Class E and Class F certificates to D (sf) from C (sf) for CD 2017-CD3, a $1.0 billion CMBS conduit transaction, following realized losses incurred from the resolution of the 229 West 43rd Street Retail Condo REO asset (originally largest, $100.0 million loan balance at issuance) as reflected in the revised September 2025 remittance report. The asset, a 248,457-square-foot retail condominium located within an 18-story office building in New York City’s Times Square, was liquidated on August 12, 2025, for $28.0 million, resulting in a full loss on the $285.0 million whole loan, reflecting a loss severity of about 101%. A December 2024 appraisal valued the property at $48.0 million ($193 per sf), representing a 46.7% decline from its March 2024 appraisal of $90.0 million ($362 per sf) and an 89.8% decline from its issuance value of $470.0 million ($1,892 per sf).
According to the September 2025 remittance report, cumulative principal losses on the transaction totaled $101.9 million, including non-recoverable advances. Classes G and F have been reduced to zero and the realized losses have resulted in the principal balance of Class E being reduced by $25.0 million (69.9% of the original certificate balance).
KBRA's other outstanding ratings are unchanged at this time.
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