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KBRA Downgrades Seven Ratings, Removes Seven Ratings From Watch Downgrade Status, and Affirms All Other Ratings for CGCMT 2015-GC31

10 Mar 2026   |   New York

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KBRA downgrades the ratings of seven classes of certificates and removes them from Watch Downgrade (DN) where they were placed in December 2025. KBRA also affirms the ratings of the remaining three classes for CGCMT 2015-GC31. The CMBS conduit transaction’s original balance of $723.3 million and loan count of 50 have currently factored down to $225.0 million (31.1% of original balance) and four loans and one REO asset, respectively.

KBRA is also withdrawing the rating of the interest-only class X-A following its downgrade to BB+ in accordance with KBRA's Methodology for Rating Interest-Only Certificates as there are five assets remaining in the pool.

The rating actions are based on, among other factors, KBRA’s identification of KBRA Loans of Concern (K-LOC) which amount to 100% of the outstanding collateral; its estimated probability of default-adjusted losses of $121.0 million and related recoveries; historical accumulated losses of $36.4 million; and current interest shortfalls of $14.6 million that are affecting classes A-4 and below, and the possibility of additional shortfalls while the servicer resolves the transaction’s specially serviced assets. Interest shortfalls have impacted all classes since November 2025 after the special servicer instructed the master servicer to withhold interest funds to pay for holding/operating costs related to the 135 South LaSalle loan (44.5% of the pool balance).

As of the February 2026 remittance period, the five K-LOCs are all specially serviced, of which one (44.5%) is 90+ days delinquent, one is performing matured (32.0%), one is nonperforming matured (17.2%), one is current with a forbearance (4.1%), and one (2.3%) is REO. The details of the assets are outlined below.

135 South LaSalle ($100.0 million, 44.5%, K-LOC, Specially Serviced, 90+ days)

  • The loan is collateralized by a 1.3 million sf office building located within the Central Loop district of downtown Chicago. The property was formerly the headquarters of LaSalle Bank, which was acquired by Bank of America in 2007.
  • The loan transferred to the special servicer in December 2021 following the departure of Bank of America, which leased 61.1% of the collateral square footage until its lease expiration in July 2021. The borrower could not lease the space and decided to convert the office building into a mixed-use building, replacing some of the office space with residential units and retail space.
  • In April and May 2025, $34.4 million of non-recoverable advances were reimbursed to the servicer and allocated as a loss to the trust. The special servicer is working with the borrower to modify the loan, which if executed, would permit the borrower to obtain Tax Increment Financing (TIF) for a partial residential conversion. Between October 2025 and February 2026, the master servicer has withheld $1.5 million in funds from the trust to pay for operating expenses and holding costs of the asset. A final cumulative estimate of future holdbacks was not provided to KBRA. The special servicer indicated that the re-development would occur in separate phases, with each phase constituting a partial release of collateral and also requiring a paydown of the loan. Media sources have indicated that the TIF funding was approved by Chicago City Council in November 2025 and that re-development is expected to begin in Spring 2026.
  • The property’s most-recent occupancy was 11.0%, according to the servicer, and net cash flow has been negative since 2024. An appraisal dated November 2024 valued the property at $44.5 million ($34 per sf), 86.5% below the $330.0 million ($252 per sf) value at issuance. The asset carries an ARA of $94.1 million, resulting in a cumulative ASER of $1.1 million. The loan was determined to be non-recoverable by the servicer in April 2024 and cumulative non-recoverable interest totals $6.4 million.
  • KBRA’s analysis resulted in an estimated loss of $56.6 million (70.6% estimated loss severity). The loss is based on a KBRA liquidation value of $40.1 million ($34 per sf) and a projected total exposure of $110.7 million. The value is derived using 90% of the November 2024 appraisal value.

Selig Office Portfolio ($72.0 million, 32.0%, 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. 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 because 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. The borrower is in discussion with the special servicer for a potential extension or modification.
  • According to the November 2025 rent roll, the portfolio was 58.2% leased, down from 67.5% at last review and down from 92.4% at issuance. Lease rollover through YE 2026, inclusive of MTM leases, represents 17.9% of total base rent.
  • The loan's DSC was 1.57x for the nine months ended September 2025, according to the servicer. An appraisal report dated August 2025 indicates a valuation of $341.2 million ($210 per sf), which is 37.3% below the $544.5 million ($334 per sf) value at issuance. An aggregate ARA of $31.2 million was assigned to the loan in October 2025, of which $11.1 million was allocated to the CGCMT 2015-GC31 transaction.
  • KBRA's analysis resulted in an estimated loss of $168.9 million (44.6% estimated loss severity) on a whole loan balance of $379.1 million. The loss is based on a KBRA liquidation value of $212.2 million ($130 per sf) and projected total exposure of $381.1 million. The value is derived from a direct capitalization approach using a KNCF of $19.9 million and a blended capitalization rate of 9.38%.

Pasadena Office Tower ($38.7 million, 17.2%, K-LOC, Specially Serviced, Non-Performing Maturity)

  • The loan is collateralized by a 141,969 sf, Class-A office building located 10 miles northeast of the Los Angeles CBD in Pasadena, California. The collateral consists of a nine-story building and 778 parking spaces in an adjacent five-level garage.
  • The loan transferred to the special servicer in March 2025 prior to its maturity in June 2025. The property's occupancy declined to 69.0% as of December 2024 and leases representing 86.0% of the base rent will expire through 2027.
  • The servicer reported a DSC of 1.10x for FY 2024. An appraisal dated April 2025 valued the property at $23.2 million ($163 per sf), a 59.3% decline from $56.9 million ($400 per sf) at issuance. An ARA of $18.4 million was assigned to the loan in June 2025.
  • KBRA’s analysis resulted in an estimated loss of $16.9 million (43.8% estimated loss severity). The loss is based on a liquidation value of $22.7 million ($160 per sf) and total projected exposure of $39.6 million. The value is derived from a direct capitalization approach using KNCF of $2.4 million and a capitalization rate of 10.50%.

Magnolia Hotel Omaha ($9.1 million, 4.1%, K-LOC, Specially Serviced, Current)

  • The loan is collateralized by a 145-key boutique full-service hotel located in the Omaha CBD near the University of Nebraska Medical Center and Creighton University.
  • The loan was not paid off at maturity in June 2025 and transferred to special servicing. The special servicer approved a six-month forbearance after the borrower provided a $500,000 deposit to the FF&E reserve to facilitate a sale of the asset. An additional six-month extension option is available beginning in April 2026 and will require an additional $500,000 FF&E deposit by the borrower.
  • The servicer reported an occupancy and DSC of 71.0% and 1.65x for the TTM period ended June 2025, respectively. An appraisal dated October 2025 valued the property at $17.5 million ($120,690 per key), a 5.4% increase from $16.6 million ($114,483 per key) at issuance. At this time, KBRA does not estimate a loss on this asset.

Walgreens - Smithfield ($5.2 million, 2.3%, K-LOC, Specially Serviced, REO)

  • The asset is a 14,093 sf single-tenant retail property built in 2014 in North Smithfield, Rhode Island, roughly 18 miles north of the Providence, Rhode Island CBD.
  • The loan transferred to the special servicer in the October 2020 remittance period because the collateral's sole tenant, Walgreens went dark in November 2019. Walgreens is subject to a lease that expires in April 2090. Walgreens has continued to pay rent and sublet its space to a medical office user without lender approval. The special servicer and borrower agreed to a short-term forbearance in May 2024 to facilitate a sale of the asset, which fell through after buyers expressed concerns about the removal of the subtenant. The loan was not paid off at maturity and the foreclosure sale occurred in October 2025. The special servicer has engaged a broker to sell the asset.
  • An appraisal dated September 2025 valued the property at $5.1 million ($350 per sf), a 35.5% decline from $7.9 million ($543 per sf) at issuance.
  • KBRA’s analysis resulted in an estimated loss of $1.4 million (27.3% estimated loss severity). The loss is based on a liquidation value of $4.3 million ($296 per sf) and total projected exposure of $5.7 million. The value is derived from a direct capitalization approach using KNCF of $366,000 and a capitalization rate of 8.50%.

KBRA's rating actions are as follows:

Ratings downgraded and removed from Watch Downgrade:

  • Class A-4 to BB+ (sf) from AAA (sf) DN
  • Class A-S to B- (sf) from A- (sf) DN
  • Class B to CC (sf) from BB- (sf) DN
  • Class PEZ to C (sf) from CCC (sf) DN
  • Class C to C (sf) from CCC (sf) DN
  • Class D to C (sf) from CC (sf) DN

Ratings downgraded and withdrawn:

  • Class X-A to BB+ (sf) from AAA (sf) DN and then to WR (sf)

Ratings affirmed:

  • Class E at C (sf)
  • Class F at D (sf)
  • Class G at D (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.

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: 1013863