Press Release|CMBS
KBRA Downgrades Five Ratings and Affirms Two Ratings for GSMS 2014-GC26
9 Jul 2026 | New York
KBRA downgrades the ratings of five classes of certificates and affirms all other outstanding ratings for GSMS 2014-GC26, a CMBS conduit transaction. The transaction has been reduced to four assets with an aggregate balance of $246.0 million from 92 loans totaling $1.3 billion at securitization. The rating actions are based on our identification of each of the remaining assets as KBRA Loans of Concern (K-LOCs); our estimated losses of $154.0 million (which, if realized, would impact classes D and below) and corresponding recoveries; current interest shortfalls affecting classes C and below; and the likelihood that interest shortfalls could reach higher in the capital structure during the resolution of the assets.
As of the June 2026 remittance period, two assets (62.2% of the pool balance) are REO, and one (9.4%) has a non-performing matured balloon status with the special servicer. The remaining loan (28.4%) is current in payment. Since the last review, the Rite Aid Pontiac loan ($3.7 million at issuance) was liquidated in April 2026 with a realized loss of $2.2 million. The loss was allocated to Class H, increasing its cumulative realized losses to $28.9 million.
The details of the remaining assets are outlined below.
Queen Ka'ahumanu Center ($81.1 million, 32.7%, Specially Serviced, REO)
- The asset is the fee simple interest in a 570,904 sf regional mall in Kahului, Hawaii, on the island of Maui, approximately three miles west of the Kahului airport. The mall is anchored by Foodland Supermarket and Macy's. Sears, which previously operated subject to a ground lease, vacated its store in November 2021. Ka'ahumanu Theatres, which previously leased approximately 28,000 sf, vacated in July 2023.
- The asset became REO in June 2022. The loan was initially transferred to the special servicer in June 2020 due to an imminent monetary default after the borrower requested COVID-19 relief. A foreclosure sale was subsequently completed in December 2021. A receiver remains in place and has been advancing redevelopment efforts for the property. In October 2024, the county council approved zoning changes that permit a mixed-use redevelopment. According to the special servicer, the receiver is currently working with Macy's to amend the Reciprocal Easement Agreement (REA) to facilitate the redevelopment, with execution anticipated in August 2026. Construction and repositioning of the asset will be undertaken by the eventual purchaser. The asset is not currently being marketed for sale. However, the special servicer noted that an adjacent property owner with residential development experience has expressed interest. No offers have been received to date, and discussions remain ongoing. Concurrently, the receiver is negotiating new leases with various tenants. A timeline for disposition was not available at the time of this review.
- The servicer reported an occupancy and DSC of 77.0% and 0.46x for YTD March 2026. An appraisal dated May 2025 valued the property at $40.0 million ($70 per sf), which is 66.7% below the $120.0 million ($210 per sf) value at issuance. As a result, an ARA of $61.1 million was assigned to the asset in August 2025, resulting in a cumulative ASER of $5.2 million. The asset was deemed non-recoverable by the servicer in November 2024, and cumulative non-recoverable interest totaled $6.3 million. Additionally, a cumulative amount of $7.1 million has been advanced by the trust for the asset to date.
- KBRA's analysis resulted in an estimated loss of $67.7 million (83.5% estimated loss severity) on an outstanding balance of $81.1 million. The estimated loss is based on a KBRA liquidation value of $19.7 million ($35 per sf) and projected total exposure of $87.4 million. The liquidation value considers a distressed non-stabilized disposition of the asset.
1201 North Market Street ($73.3 million, 29.5%, Specially Serviced, REO)
- The asset is the fee simple interest in a 447,439 sf, 12-story, office building located in the CBD of Wilmington, Delaware. The property's second floor functions as a data telecom carrier hotel (colocation center), which provides high speed data connections to area networks and providers.
- The asset became REO in November 2025. The loan was initially transferred to the special servicer in November 2024 after failing to pay off at maturity, compounded by occupancy concerns and a decline in financial performance since issuance. The borrower subsequently consented to a foreclosure judgment filed in July 2025, and the foreclosure sale was completed in October 2025. Occupancy concerns were primarily driven by the largest tenant, Morris Nichols Arsht & Tunnell, which represents 28.1% of total base rent and had been negotiating a relocation to another office building. However, the tenant was presented with a proposal to extend its lease at the subject property through December 2028. According to the special servicer, the tenant is now expected to remain at the property and is in the process of finalizing a 15-year lease extension.
- The servicer reported an occupancy and DSC of 74.0% and 1.20x for YTD September 2025. An appraisal dated February 2026 valued the property at $46.5 million ($105 per sf), which is 62.2% below the $123.0 million ($275 per sf) value at issuance. As a result, an ARA of $33.8 million was assigned to the asset in April 2026. The asset was deemed non-recoverable by the servicer in May 2025, and cumulative non-recoverable interest totaled $2.2 million.
- KBRA's analysis resulted in an estimated loss of $47.4 million (64.6% estimated loss severity) on the outstanding balance of $73.3 million. The estimated loss is based on a KBRA liquidation value of $29.5 million ($67 per sf) and projected total exposure of $76.9 million. The liquidation value considers a distressed non-stabilized disposition of the asset.
5599 San Felipe ($70.4 million, 28.4%, Current)
- The loan is collateralized by a 436,253 sf, 21-story urban office tower located in the Galleria/West Loop North submarket of Houston, Texas, approximately eight miles west of the CBD.
- The loan was modified in November 2024, extending the loan term by 36 months through November 2027. According to the servicer, the borrower was unable to secure refinancing due to the impending lease expiration of the property's largest tenant, Schlumberger Technology Corp. ("SLB"), which occupies 314,578 sf (69.7% of total sf) and represents 78.7% of base rent. SLB's lease is scheduled to expire in July 2027. The most recent servicer update noted that approximately 114,566 sf (36.4% of SLB's leased space) is currently subleased under agreements that expire concurrently with SLB's master lease. According to recent servicer commentary, SLB has requested a proposal for a 10-year lease extension covering 94,695 sf of its current footprint. In addition, the borrower is in discussions with two existing subtenants regarding direct leases. One subtenant, which currently occupies 22,382 sf, is negotiating a two-floor lease extension following the expiration of its sublease, while another subtenant is discussing an extension of its existing 25,300 sf sublease.
- According to the March 2026 rent roll, the property was 93.6% leased, down from 98.3% at issuance. Excluding the largest tenant, SLB, no remaining tenant occupies more than 2.3% of the property's total square footage or represents more than 2.2% of total base rent.
- The loan is current on payments and not specially serviced. However, in the event of a default, KBRA estimates that the loan could experience a loss given default of $33.1 million (47.0% estimated loss severity) on the loan balance of $70.4 million. The estimated loss is based on a KBRA liquidation value of $39.7 million ($91 per sf) and projected total exposure of $72.9 million. The liquidation value is derived from an income capitalization approach using a KNCF of $3.6 million and a capitalization rate of 9.00%.
Bank of America Plaza ($23.3 million, 9.4%, Specially Serviced, Non-Performing Matured)
- The loan is collateralized by a 55-story, LEED gold certified Class-A office building located on Bunker Hill in the Los Angeles CBD. The building totals 1.4 million sf and has nine levels of underground parking and over 24,000 sf of retail space.
- The loan transferred to special servicing in July 2024 and failed to pay off at its September 2024 maturity. In April 2025, the special servicer filed a foreclosure complaint and continues to pursue all available rights and remedies; a receiver was appointed on May 20, 2025. The receivership sale of the property to Capital Group for $210.0 million officially closed on June 16, 2026 and is expected to be reflected in the July 2026 remittance.
- Based on the September 2025 rent roll, the property is 66.5% leased, compared to 66.8% at last review and 89.5% at issuance. Lease rollover at the property through YE 2027, inclusive of MTM leases, represents 8.2% of base rent and 10.3% of collateral sf across 23 leases. The servicer reported an occupancy and DSC of 67.0% and 1.34x for YTD March 2026. The subject was reappraised for $212.5 million ($148 per sf) in December 2024, which is 64.8% below the $605.0 million ($422 per sf) value at issuance. As a result, an ARA of $223.6 million was assigned to the loan in October 2025, of which $13.0 million was allocated to the GSMS 2014-GC26 transaction. The ARA resulted in a cumulative ASER of $559,201 for this transaction.
- KBRA's analysis resulted in an estimated loss of $206.6 million (51.6% estimated loss severity) on a whole loan balance of $400.0 million, of which $12.1 million of the estimated loss is allocated to this trust. The estimated loss is based on a KBRA liquidation value of $206.7 million ($144 per sf) and projected total exposure of $413.3 million. The liquidation value is derived from receivership sale price less brokerage costs and city fees.
Details concerning the ratings adjustments are as follows:
- Class B to BB+ (sf) from BBB (sf)
- Class C to B- (sf) from B (sf)
- Class PEZ to B- (sf) from B (sf)
- Class D to C (sf) from CCC (sf)
- Class E to C (sf) from CC (sf)
Details concerning the ratings affirmations are as follows:
- Class F at C (sf)
- Class G at C (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.