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KBRA Downgrades Five Ratings and Affirms One Rating for DBUBS 2011-LC3 Providence Place Mall

27 May 2026   |   New York

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KBRA downgrades the ratings of five classes of PM certificates and affirms the remaining outstanding rating for DBUBS 2011-LC3, a CMBS conduit/fusion transaction. The PM classes are rake certificates that derive 100% of their cash flow from the non-pooled components of the Providence Place Mall loan. No other classes issued by DBUBS 2011-LC3 are rated by KBRA. The downgrades reflect a continued decline in the loan’s KNCF, its matured non-performing status with the special servicer, and interest shortfalls affecting all rated classes. The loan was transferred to the special servicer in April 2024 and as of May 2026, there is a $137.1 million ARA, cumulative ASER amount of $5.3 million, and total servicer advances of $1.2 million.

The Providence Place Mall loan is the largest exposure in DBUBS 2011-LC3, with an outstanding principal balance of $249.9 million ($245 per sf) as of the May 2026 distribution date. The loan includes a $39.6 million pooled senior trust component, a $101.2 million non-pooled senior trust component, and $109.1 million in non-pooled junior trust components. The non-pooled senior component supports the Class PM-1 certificates, and the non-pooled junior component supports the Class PM-2, PM-3, PM-4, and PM-5 certificates. The transaction collateral is a single, non-recourse, first lien mortgage loan secured by the borrower’s leasehold interest in a 1.0 million sf portion of Providence Place Mall, a 1.2 million sf super-regional mall located in Providence, Rhode Island. The land underlying the property is leased from the Rhode Island Economic Development Corporation under a 99-year ground lease expiring in 2096, with four 99-year extension options remaining.

The loan originally transferred to special servicing in April 2021 when a refinance could not be secured by the borrower prior to its May 2021 maturity date. It was subsequently modified in August 2021 and the maturity date was extended to May 2022 with two additional one-year extension options. Additionally, the loan was changed to full IO after the closing date of the modification and included a full cash flow sweep. The final maturity was May 6, 2024 and a receiver took control of the property in November 2024.

According to the servicer, the property was actively marketed beginning in December 2025 targeting institutional and regional investors. Despite strong initial interest, only a few credible bids emerged due to the complexity of the asset and required capital expenditures. In April 2026, the receivership court approved a $133.0 million bid from a joint venture between Pyramid Management Group and Joseph Paolino Jr., the former mayor of Providence. The receiver is finalizing the purchase and sale agreement and then will submit a sale order to the court for approval which is expected to occur quickly. The buyer has a 75-day diligence period which will expire on July 19, 2026. Closing is expected to occur 30 days after the expiration of the due diligence period. There are no other contingencies.

KBRA analyzed the cash flow for the property utilizing information from the trustee and servicer to determine KNCF. The analysis produced a KNCF of $13.6 million and a KBRA value of $120.2 million ($123 per sf). The resulting in-trust KLTV is 208.0%, compared to 147.6% at KBRA’s last ratings change in May 2025 and 70.2% at securitization. KBRA’s value of $120.2 million minus the loan’s estimated total exposure of $251.1 million (whole loan balance plus advances) produces an estimated loss of $130.9 million, which if realized would impact all of the rated classes. An appraisal dated June 2024 valued the property at $191.0 million ($195 per sf), which represents a 65.8% decrease from its $558.0 million ($569 per sf) value at securitization. KBRA maintains the loan’s K-LOC designation and KPO of Underperform.

Details for the classes with rating changes are as follows:

  • Class PM-1 to C (sf) from BB (sf)
  • Class PM-2 to C (sf) from B- (sf)
  • Class PM-3 to C (sf) from CCC (sf)
  • Class PM-4 to C (sf) from CC (sf)
  • Class PM-X to C (sf) from BB (sf)

Details for the classes with rating affirmations are as follows:

  • Class PM-5 at C (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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