Press Release|CMBS
View PDF

KBRA Downgrades Two Ratings, Affirms Three Ratings, and Withdraws Three Ratings for WFCM 2014-LC18

17 Oct 2025   |   New York

Contacts

KBRA downgrades the ratings two classes of certificates and affirms three ratings for WFCM 2014-LC18, a $167.3 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction and are based on the performance and expected recovery of the transaction's seven remaining assets, all of which are identified as K-LOCs. Of these, six (83.7% of the pool balance) are specially serviced, including one REO asset (9.5%), one loan in foreclosure (9.9%), one non-performing matured balloon loan (20.9%), and thee performing matured loans (43.4%). The details of all remaining assets are outlined below.

KBRA also withdraws the ratings of three classes of interest-only (IO) certificates in accordance with KBRA’s Methodology for Rating Interest-Only Certificates in CMBS Transactions, as there are fewer than 10 loans remaining in the pool.

2900 Fairview Park Drive (largest, 20.9%, Non-Performing Matured Balloon)

  • The loan is collateralized by a 147,000 sf, suburban office building in Falls Church, Virginia, 10 miles west of Washington D.C.
  • KBRA identified the loan as a K-LOC and revised the KPO to Underperform due to its non-performing matured balloon and special servicer statuses. The loan transferred to the special servicer in January 2025 and foreclosure proceedings have been initiated. In addition to the maturity default, the sole-tenant of the property, HITT Contracting, will vacate at its lease expiration in September 2027. The tenant broke ground on a new corporate headquarters in Washington D.C. An appraisal dated February 2025, indicates an as-is value of $10.5 million, down from $62.6 million at securitization. As of September 2025, a $22.0 million ARA and a $468,897 ASER were assigned. KBRA's analysis resulted in an estimated loss of $26.8 million (76.6% estimated loss severity). The loss is based on a value of $10.5 million ($71 per sf), which considers the recent appraisal.

Hilton Garden Inn Cupertino (2nd largest, 19.1%, Performing Matured)

  • The loan is collateralized by a 164-key, select-service hotel in Cupertino, California, nine miles west of San Jose.
  • KBRA maintains the loan's K-LOC designation and KPO of Underperform due to its performing matured and special servicer statuses. The loan transferred to the special servicer in March 2024 and a forbearance was executed which extended the loan through December 2025. The forbearance includes one additional 12-month extension option, active cash management, repayment of fees, and a deed-in-lieu security package in the event of default. An appraisal dated August 2025, indicates an as-is value of $40.0 million, down from $60.1 million at securitization. KBRA's analysis resulted in an estimated loss of $10.2 million (32.0% estimated loss severity). The loss is based on a value of $23.3 million ($142,110 per key), which is derived from a direct capitalization approach using a KNCF of $2.6 million and a capitalization rate of 11.25%.

One Towne Square (3rd largest, 17.5%, Performing Matured)

  • The loan is collateralized by a 426,870 sf, suburban office building located in Southfield, Michigan, 17 miles northwest of Detroit.
  • KBRA identified the loan as a K-LOC and revised the KPO to Underperform due to its performing matured and special servicer statuses. The loan transferred to the special servicer in October 2024 and a forbearance was executed which extended the loan through December 2026. The forbearance includes one additional 12-month extension option, active cash management, repayment of fees, and funding a $1.7 million general reserve. As of March 2025, the property was 82.7% leased, compared to 84.6% at last review and 89.8% at issuance. An appraisal dated February 2025, indicates an as-is value of $44.5 million, down from $48.0 million at securitization. At this time, KBRA does not estimate a loss on this asset.

Colorado Mills (4th largest, 16.3%, Current)

  • The loan is collateralized by a 918,448 sf portion of a 1.1 million sf regional mall in Lakewood,Colorado, 10 miles west of Denver.
  • KBRA maintains the loan's K-LOC designation and KPO of Underperform due to the loan's previous status with the special servicer and the resulting loan modification. The terms of the modification included returning the loan to the master servicer, extending the maturity to November 2026, a $7.5 million principal curtailment, and funding a $3.0 million general reserve. Based on the June 2025 rent roll, the property was 90.1% leased, compared to 83.9% at last review and 86.3% at issuance. The increase in occupancy since last review is attributable to nine tenants signing leases for about 34,000 sf. An appraisal dated October 2024, indicates an as-is value of $135.0 million, down from $215.0 million at securitization. At this time, KBRA does not estimate a loss on this asset.

YRC Headquarters (5th largest, 9.9%, Foreclosure)

  • The loan is collateralized by a 332,937-sf, suburban office complex in Overland Park, Kansas, 18 miles south of Kansas City.
  • KBRA maintains the loan's K-LOC designation and KPO of Underperform due to the loan's foreclosure. The loan transferred to the special servicer in June 2023 and is currently being operated by a receiver. The future advances on the loan have been deemed non-recoverable, and as of September 2025 the total outstanding principal and interest and servicer advances total $2.7 million. Following the the August 2023 bankruptcy and departure of the sole-tenant, YRC Worldwide Inc., the property has remained vacant. An appraisal dated May 2025, indicates an as-is value of $9.3 million, down from $45.3 million at securitization. As of September 2025, a $5.5 million ARA and a $279,952 ASER were assigned. KBRA's analysis resulted in an estimated loss of $10.6 million (64.6% estimated loss severity). The loss is based on a value of $7.2 million ($22 per sf), which is derived from a direct capitalization approach using a stabilized KNCF of $1.1 million, a capitalization rate of 10.00%, and a $3.7 million downward adjustment to account for income lost during the stabilization period.

Hilton Garden Inn Austin (6th largest, 9.5%, REO)

  • The asset is a 138-key, select-service hotel located in Austin, Texas, 12 miles north of the CBD.
  • KBRA maintains the loan's K-LOC designation and KPO of Underperform due to its REO Status. The title was taken in May 2025. Currently the special servicer is evaluating exit strategies and the property is not listed for sale. An appraisal dated July 2025, indicates an as-is value of $15.0 million, down from $30.4 million at securitization. As of September 2025, a $2.8 million ARA and a $10,709 ASER were assigned. KBRA's analysis resulted in an estimated loss of $4.7 million (29.9% estimated loss severity). The loss is based on a value of $11.3 million ($81,500 per key), which considers the recent appraisal.

Oneida & Holmgren Way (7th largest, 6.8%, Performing Matured)

  • The loan is collateralized by a 130,500 sf retail property located in Ashwaubenon, Wisconsin, four miles south of Green Bay.
  • KBRA maintains the loan's K-LOC designation and KPO of Underperform due to its performing matured and special servicer statuses. The loan transferred to the special servicer in October 2024 and a forbearance was executed which extended the loan through January 2026. Based on the June 2025 rent roll, the property was 98.6% leased, compared to 83.0% at last review and 92.8% at issuance. Since the loan extension, three leases totaling 41,200 sf have been executed. The major leases are to The Picklr for 19,900 sf through 2035 and to Lets Run Around for 19,500 sf through 2039. An appraisal dated March 2025, indicates an as-is value of $12.1 million, down from $19.5 million at securitization. KBRA's analysis resulted in an estimated loss of $2.6 million (23.1% estimated loss severity). The loss is based on a value of $9.8 million ($75 per sf), which is derived from a direct capitalization approach using a KNCF of $931,025 and a capitalization rate of 9.50%.

Details concerning the classes with ratings changes are as follows:

  • Class D to B (sf) from BB (sf)
  • Class E to CCC (sf) from B- (sf)

Details concerning the ratings affirmations are as follows:

  • Class PEX at A (sf)
  • Class C at A (sf)
  • Class F at CC (sf)

Details concerning the classes with ratings withdrawn:

  • Class X-B to WR from AAA (sf)
  • Class X-E to WR from B- (sf)
  • Class X-F to WR from CC (sf)

Ratings 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.

Related Publication

Methodologies

Disclosures

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: 1011584