Press Release|CMBS
View PDF

KBRA Downgrades Three Ratings, Withdraws One Rating, and Affirms All Other Ratings for DBJPM 2016-C3

12 Mar 2026   |   New York

Contacts

KBRA downgrades the ratings of three classes of certificates, withdraws one rating, and affirms all other outstanding ratings for DBJPM 2016-C3, a $689.6 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction. The downgrades are driven by KBRA's estimated losses on five K-LOCs (23.9% of the pool) and the resulting decrease in loss-adjusted C/E levels. The asset with the largest loss is Westfield San Francisco Centre (12.2%), which is REO and expected to have a loss severity of more than 100% when it is liquidated. The rating actions also take into account the deleveraging at the top of the capital structure from loan payoffs, amortization, and defeasance.

As of the February 2026 remittance period, there are two specially serviced assets (14.4%), of which one (12.2%) is REO and one (2.2%) is delinquent. KBRA identified five K-LOCs (23.9%), including the specially serviced assets. Each of the K-LOCs has an estimated loss. The K-LOCs are outlined in the table below.

K-LOCs Loss Given Default (000s) Loss Severity 1 Westfield San Francisco Centre MU 84,000 12.2% Y REO N REO 01/24/2022 $85,709 102.0% 12 260 Townsend Street OF 28,200 4.1% N C N Lease Rollover 11/06/2024 $16,789 59.5% 11 Intercontinental Kansas LO 24,834 3.6% N C Y Maturity 06/25/2024 $1,567 6.3% 21 Williamsburg Premium RT 15,000 2.2% Y 30+ N Modification 12/29/2025 $857 5.7% 20 Village at Shoal Creek RT 12,515 1.8% N C N DSCR 03/30/2020 $4,799 38.3% Total K-LOCs $164,548 23.9% $109,720 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 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

Details concerning the withdrawn rating are as follows:

  • Class A-SB to WR from AAA (sf)

Details concerning the ratings adjustments are as follows:

  • Class A-M to AA- (sf) from AAA (sf)
  • Class B to BB+ (sf) from A (sf)
  • Class C to CCC (sf) from B- (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.

Doc ID: 1013918