KBRA Downgrades One Rating, Withdraws One Rating, and Affirms All Other Ratings for GSMS 2015-GC32
22 May 2026 | New York
KBRA downgrades the ratings of class G, withdraws the rating of class D, and affirms the ratings for classes E and F for GSMS 2015-GC32. The transaction has been reduced to five loans and a balance of $67.3 million from 63 loans and $1.0 billion at securitization. Each of the remaining assets have been identified as KBRA Loans of Concern (K-LOCs). The rating actions are based on KBRA's expected resolutions of the remaining loans and our estimated losses totaling $29.5 million (which, if realized, would impact class G and below).
As of the May 2026 remittance period, the five assets are specially serviced, of which three (86.8%) are performing matured balloon and two (13.2%) are in foreclosure.
Hilton Garden Inn Pittsburgh/Southpointe ($26.3 million, 39.0%, K-LOC, Specially Serviced, Performing Matured Balloon)
- The loan is collateralized by a four-story, 175-key full-service hotel, located in Canonsburg, Pennsylvania, approximately 15 miles southwest of Pittsburgh.
- The loan transferred to the special servicer in May 2025 due to imminent monetary default. The trailing twelve-month (TTM) period ended January 2025 servicer NCF was $1.1 million which represents a 69.3% decline from the $3.5 million NCF underwritten at securitization. The decline is primarily attributable to a decline in occupancy since securitization, in addition to a flat ADR. A Pre-Negotiation Letter (PNL) has been executed, and the lender and borrower are in discussions around a potential discounted pay-off (DPO) which would require the borrower to contribute a substantial amount of additional equity. The servicer reported an occupancy and DSC of 51.7% and 0.59x for the TTM ended January 2025. An updated appraisal dated July 2025 valued the asset at $27.6 million ($157,714 per key), which is 36.8% below the appraised value of $43.7 million at securitization.
- KBRA’s analysis resulted in an estimated loss of $12.9 million (49.1% estimated loss severity) on the loan balance of $26.3 million. The loss is based on a KBRA liquidation value of $13.4 million ($76,611 per key) and a total projected exposure of $26.3 million. The liquidation value was derived from a direct capitalization approach using a stabilized KNCF of $1.8 million, a capitalization rate of 12.50%, and a downward value adjustment of $990,534 to account for income lost during the stabilization period.
Selig Office Portfolio ($25.0 million, 37.1%, K-LOC, Specially Serviced, Performing Matured Balloon)
- The loan is collateralized by nine office properties in Seattle, Washington totaling 1.6 million sf. The properties range in size from 35,432 sf to 447,792 sf and seven were developed by an affiliate of the sponsor, Martin Selig Real Estate, between 1971 and 1986.
- The loan was transferred to the special servicer in November 2024 when the borrower indicated it would not be able to pay off or refinance the loan by the April 2025 maturity. A custodial receiver was appointed, and a forbearance was executed through January 6, 2026. Currently, negotiations around a potential three-year extension between the servicer and borrower are ongoing. According to the November 2025 rent roll, the portfolio was 58.2% leased, down from 92.4% at issuance. The servicer reported an occupancy and DSC of 59.0% and 1.57x for the annualized YTD September 2025 period. An updated appraisal dated August 2025 valued the portfolio at $341.2 million ($210 per sf), which is 37.3% below the appraised value of $544.5 million at securitization. As a result, an ARA of $20.1 million was assigned to the loan in October 2025.
- KBRA's analysis resulted in an estimated loss of $170.1 million (44.9% estimated loss severity) on the whole loan balance of $379.1 million, of which $11.2 million would be allocated to the trust. The loss is based on a KBRA liquidation value of $212.2 million ($130 per sf) and projected total exposure of $382.3 million. The liquidation value was derived from a direct capitalization approach using a KNCF of $19.9 million and a blended capitalization rate of 9.38%.
520 West Avenue ($7.2 million, 10.7%, K-LOC, Specially Serviced, Performing Matured Balloon)
- The loan is collateralized by a 28,199 sf mixed-use asset in Norwalk, Connecticut, one mile west of the CBD.
- The loan transferred to the special servicer in June 2025 for imminent monetary default prior to its scheduled July 2025 maturity date. Pursuant to the borrower's December 2024 rent roll, inclusive of additional leasing updates, the asset is 22.0% occupied following the departure of the former largest tenant, The Norwalk Hospital Association (78.0% of collateral sf) prior to its scheduled June 2026 lease expiration. The special servicer is in the process of filing a foreclosure complaint and motion to appoint a receiver while they evaluate a potential loan extension at the request of the borrower. An updated appraisal dated July 2025 valued the asset at $8.9 million ($316 per sf) which is 32.5% below the appraised value of $13.2 million at securitization.
- KBRA’s analysis resulted in an estimated loss of $1.2 million (16.4% estimated loss severity) on the loan balance of $7.2 million. The loss is based on a KBRA liquidation value of $6.7 million ($237 per sf) and a total projected exposure of $7.9 million. The liquidation value was based on 75% of the most recent appraisal.
Holiday Inn Express & Suites - Sherman TX ($5.8 million, 8.6%, Specially Serviced, Foreclosure)
- The loan is collateralized by an 84 key, limited-service Holiday Inn Express & Suites in Sherman, Texas, approximately 70 miles north of the Dallas CBD.
- The loan transferred to the special servicer in July 2025 after failing to pay off at its scheduled maturity date. The most recent FY 2024 servicer NCF was $595,757 which represents a 24.0% decline from the $783,979 NCF underwritten at securitization. The decline can primarily be attributed to an increase in operating expenses. A foreclosure sale was scheduled for February 2026; however, the borrower filed for Chapter 11 bankruptcy protection which resulted in a settlement. As part of the agreement, the borrower was to pay off the loan in full, prior to the May 2026 remittance period. The borrower did not repay the loan, and the special servicer will proceed with a foreclosure sale. An updated appraisal dated August 2025 valued the asset at $7.1 million ($84,524 per key) which represents a 23.7% decline from the appraised value of $9.3 million at securitization.
- KBRA's analysis resulted in an estimated loss of $2.0 million (34.9% estimated loss severity) on the loan balance of $5.8 million. The loss is based on a KBRA liquidation value of $4.4 million ($52,283 per key) and a total projected exposure of $6.4 million. The liquidation value was derived from a direct capitalization approach using a KNCF of $505,055 and a capitalization rate of 11.50%.
Rite Aid Cedar Springs, MI ($3.1 million, 4.6%, K-LOC, Specially Serviced, Foreclosure)
- The loan is collateralized by a 14,673 sf retail building located in Cedar Springs, Michigan, approximately 20 miles north of Grand Rapids.
- The loan transferred to the special servicer in November 2024 when the asset's sole tenant, Rite Aid, vacated the subject. A PNL was executed in January 2025 and a receiver was subsequently appointed in April 2025. At this time a receiver sale has been scheduled for May 2026; however, KBRA does not have additional updates regarding the pending sale. An updated appraisal dated January 2025 valued the asset at $2.4 million ($164 per sf) which represents a 70.5% decline from the appraised value of $6.3 million at securitization.
- KBRA's analysis resulted in an estimated loss of $2.2 million (71.4% estimated loss severity) on the loan balance of $3.1 million. The loss is based on a value of $1.2 million ($82 per sf) and a total projected exposure of $3.4 million. The liquidation value was derived based on a distressed non-stabilized disposition of the asset.
Details concerning the withdraw is as follows:
- Class D to WR (sf) from BBB- (sf)
Details concerning the ratings change is as follows:
- Class G to CC (sf) from CCC (sf)
Details concerning the rating affirmations are as follows:
- Class E at BB (sf)
- Class F at B- (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.