KBRA Downgrades Three Ratings of CGCMT 2016-P4 to D (sf) Following Realization of Principal Losses
23 Dec 2025 | New York
KBRA downgrades the ratings of the E, F, and G certificates to D (sf) for CGCMT 2016-P4, a $573.6 million CMBS conduit transaction, following realized losses incurred from the resolution of the 401 South State Street REO asset ($32.0 million loan balance at issuance) as reflected in the November 2025 remittance report. The asset, a 487,022 sf, two-building office complex located within the East Loop district of downtown Chicago, Illinois, was liquidated on October 14, 2025, for net proceeds totaling $4.7 million. Liquidation expenses for the asset also totaled $4.7 million, which resulted in a $28.4 million loss to the trust (100% loss severity on the outstanding balance at disposition), during the November 2025 remittance period. An appraisal dated May 2024 valued the property at $9.2 million ($19 per sf), which is 88.0% below the $76.5 million ($157 per sf) appraised value at issuance.
According to the December 2025 remittance report, cumulative principal losses on the transaction totaled $50.8 million, which includes $22.3 million in cumulative reimbursements of non-recoverable advances to the servicer for the REO asset prior to disposition. Following the liquidation, certificate balances for classes F and G have were reduced to zero and the realized losses have resulted in the principal balance of Class E being reduced to $8.7 million (46.1% of the original certificate balance).
KBRA's other outstanding ratings for the transaction are unchanged at this time.
Details concerning the ratings adjustments are as follows:
- Class E to D (sf) from CC (sf)
- Class F to D (sf) from C (sf)
- Class G to D (sf) from C (sf)
Rating Sensitivities
Future rating actions will be dependent upon the ongoing assessment of the timing and likelihood of ultimate payment of principal and accrued interest on the rated certificates. The assessment will consider the expected and actual losses on the remaining assets in the transaction, as well as, the magnitude and extent of interest shortfalls, if any, on the certificates.
To access ratings and relevant documents, click here.