KBRA Places Five Ratings for JPMDB 2016-C2 on Watch Downgrade

KBRA places the ratings of five classes of certificates for JPMDB 2016-C2, a $292.4 million CMBS conduit transaction, on Watch Downgrade (DN). The Watch placements are based on an increase in interest shortfalls which are affecting up to and including the Class B certificates as of the July 2026 reporting period. The increase in interest shortfalls is due to the non-recoverability determination for the 100 East Pratt loan ($55.3 million, 18.9% of the pool balance) and the Legends at Kingsville loan ($18.0 million, 6.2%). As a result, four loans ($161.2 million, 35.7%) are considered non-recoverable as of July 2026, resulting in interest reductions totaling $456,524. The interest reductions are expected to cause recurring interest shortfalls for classes B and below. Additionally, non-recoverable advances total $19.7 million as of July 2026. The transaction has a cumulative appraisal reduction amount of $51.1 million from three specially serviced assets (49.0%) and monthly ASERs from these assets have contributed to interest shortfalls. In placing the ratings on Watch Downgrade (DN), KBRA also considered the potential for continuing shortfalls from recurring ASERs and the potential for additional interest shortfalls associated with future interest adjustments.

As of the July 2026 remittance period, there are five specially serviced assets (81.6%), of which three (38.0%) are matured non-performing. KBRA identified the six non-defeased loans (98.6%) as K-LOCs, including the specially serviced assets.

KBRA will continue to monitor the transaction and the underlying loans' performance and will seek to resolve or update the Watch Downgrade within 90 days.

Details concerning the class that has been placed on Watch are as follows:

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