KBRA Downgrades Six Ratings and Affirms All Other Ratings for CGCMT 2016-P3

KBRA downgrades the ratings of six classes of certificates and affirms all other outstanding ratings for CGCMT 2016-P3, a $627.7 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction, which has exhibited a worsening in overall pool performance and significant increase in KBRA's estimated losses compared to KBRA's last review.

As of the March 2025 remittance period, there are three specially serviced assets (23.5% of the pool balance), of which one is in foreclosure (7.8%) and two are current (15.5%). KBRA has identified ten K-LOCs (49.6%), of which six (43.0%) have an estimated loss. These include:

Six top 10 loans:

Empire Mall (largest, 9.2% of the pool balance, 34.4% estimated loss severity)
Marriott Midwest Portfolio (2nd largest, 8.8%, 33.3%)
Nyack College NYC (3rd largest, 7.8%, 61.9%)
79 Madison Avenue (4th largest, 7.2%, 17.6%)
5 Penn Plaza (5th largest, 6.7%, 24.6%)
600 Broadway (10th largest, 3.3%)

One other K-LOC has an estimated loss:

The Round (3.3%, 26.3%)

The remaining three K-LOCs do not have estimated losses and represent 3.3% of the pool balance.

Excluding the K-LOCs with estimated losses, the transaction’s WA KLTV is 90.4%, compared to 109.7% at KBRA's last ratings change and 100.0% at securitization. The KDSC is 1.47x, compared to 1.48x at KBRA's last ratings change and 1.70x at securitization.

Details concerning the classes with ratings changes are as follows:

Class C to B (sf) from BBB (sf)
Class EC to B (sf) from BBB (sf)
Class D to CCC (sf) from B- (sf)
Class E to CC (sf) from CCC (sf)
Class F to C (sf) from CC (sf)
Class X-D to CCC (sf) from B- (sf)

KBRA Downgrades Six Ratings and Affirms All Other Ratings for CGCMT 2016-P3

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