Press Release|CMBS
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KBRA Downgrades Two Ratings, Withdraws One Rating, and Affirms All Other Ratings for GSMS 2016-GS3

2 Jul 2026   |   New York

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KBRA withdraws the rating on Class A-3, downgrades the ratings of two classes of certificates and affirms all other outstanding ratings of GSMS 2016-GS3, a $441.6 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction and are primarily based on KBRA’s estimated losses for four K-LOCs (37.7% of the pool balance) and the resulting loss - adjusted C/E levels.

As of the June 2026 remittance period, there are four specially serviced assets (51.5%), of which one (10.1%) is over 30 days delinquent and one (13.2%) is matured non-performing. KBRA identified seven (67.0%) K-LOCs, including the specially serviced assets. Of the K-LOCs, four (37.7%) have estimated losses. The K-LOCs are depicted in the table below:

K-LOCs Loss Given Default (000s) Loss Severity 02A1 540 West Madison OF 87,000 19.7% Y C N Specially Serviced 08/28/2025 - - 6 Panorama Corporate Center OF 58,500 13.2% Y NPM N Non-Performing Maturity Balloon 11/24/2025 $7,989 13.7% 8 Hilton Irvine LO 44,765 10.1% Y 30+ N Specially Serviced 06/06/2025 $11,869 26.5% 12 Cool Springs Commons OF 37,000 8.4% Y C N Specially Serviced 08/20/2020 $13,793 37.3% 14 Shoppes at Rio Grande RT 26,834 6.1% N C N Maturity 06/01/2020 - - 15A1 Embassy Suites Portland Airport LO 26,022 5.9% N C N Maturity 04/08/2020 $8,246 31.7% 20 Lincoln Corners RT 15,621 3.5% N C N Maturity 05/29/2020 - - Total K-LOCs $295,743 67.0% $41,897 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 classes with rating changes are as follows:

  • Class E to B- (sf) from BB- (sf)
  • Class F 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.

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