KBRA Downgrades Three Ratings and Affirms All Other Outstanding Ratings for BENCHMARK 2018-B3

KBRA downgrades the ratings of three classes of certificates and affirms all other outstanding ratings for BENCHMARK 2018-B3, an $816.8 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 change in March 2024. The rating actions also reflect KBRA's estimated losses for seven K-LOCs (27.4% of the pool balance) and the resulting loss adjusted C/E levels.

As of the March 2025 remittance period, there are two specially serviced assets (4.2%), of which one (3.7%) is in foreclosure and one (0.5%) is 90+ days delinquent. Additionally, there is one non-specially serviced loan (2.2%) that is 60+ days delinquent. KBRA identified 11 K-LOCs (35.0%), including the specially serviced assets. Of the K-LOCs, seven (27.4%) have estimated losses. This includes:

Four of the top 10 non-defeased loans (21.0%):

Three other K-LOCs have estimated losses:

Excluding the K-LOCs with estimated losses, the transaction's WA KLTV is 90.2%, compared to 101.5% at KBRA's last ratings change and 101.2% at securitization. The KDSC is 1.63x, compared to 1.62x at KBRA's last ratings change and 1.76x at securitization.

Details concerning the classes with ratings changes are as follows:

To access ratings and relevant documents, click here.

Click here to view the report.

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