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KBRA Downgrades Five Ratings and Affirms All Other Outstanding Ratings for GSMS 2017-GS7

5 Jun 2026   |   New York

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KBRA downgrades the ratings of five classes of certificates and affirms all other outstanding ratings of GSMS 2017-GS7, a $984.9 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction, which has exhibited a worsening in pool performance since KBRA's last ratings adjustments in June 2025. The rating actions also reflect KBRA's estimated losses for three K-LOCs (13.9% of the pool balance) and the resulting loss adjusted C/E levels. If realized, KBRA’s estimated losses would reduce the principal balances of class J-RR to zero and reduce class H-RR by more than 90.0%. Additionally, the rating actions also consider the risk that interest shortfalls may increase and rise up the capital structure during the resolution of the non-defeased loans as their scheduled maturity dates approach.

As of the May 2026 remittance period, there are two specially serviced loans (11.9% of the pool balance), of which one (3.8%) is in foreclosure. KBRA identified three K-LOCs (13.9%), all of which have estimated losses. The K-LOCs are depicted in the table below:

Loss Given Default (000s) Loss Severity 3 Lafayette Centre OF $80,250 8.1% Y C N Specially Serviced 10/06/2023 $38,859 48.4% 11 90 Fifth Avenue MU $37,000 3.8% Y 60+ N Foreclosure 03/18/2024 $18,985 51.3% 18 One West 34th Street MU $20,000 2.0% N C N Low DSC 01/25/2021 $10,450 52.3% Total K-LOCs $137,250 13.9% $68,295 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. K-LOC Date 1 KBRA Estimated 2 K-LOCs Prosp. ID Loan Name Prop Type Current In- Trust Balance (000s) % of Deal Balance SS Loan Status Mod (Y/N) Primary K-LOC Reason
Source: KBRA

Excluding the K-LOCs with an estimated loss, the transaction’s WA KLTV is 91.6%, compared to 92.2% at last review and 97.6% at securitization. The KDSC is 2.19x, compared to 2.13x at last review and 2.00x at securitization.

Details concerning the ratings changes are as follows:

  • Class E to BBB- (sf) from BBB+ (sf)
  • Class F-RR to B (sf) from BBB- (sf)
  • Class G-RR to CCC (sf) from B- (sf)
  • Class J-RR to CC (sf) from CCC (sf)
  • Class X-D to BBB- (sf) from BBB+ (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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