KBRA Downgrades Two Ratings for COMM 2018-COR3 to D (sf) Following Realization of Principal Losses
1 Sep 2026 | New York
KBRA downgrades the ratings of classes F-RR and G-RR to D (sf) from C (sf) for COMM 2018-COR3, a $905.8 million CMBS conduit transaction, following realized losses incurred from the liquidation of the Kingswood Center REO asset ($65.5 million trust balance at disposition) and non-recoverable advance reimbursements to the servicer related to the 315 West 36th Street REO asset ($47.0 million, 5.2% of the pool balance) and the 644 Broadway loan ($21.2 million, 2.3%), as reflected in the August 2026 remittance report.
The Kingswood Center REO asset is a 130,218 sf mixed-use building located in the New York City borough of Brooklyn. The property was liquidated in July 2026 when it was sold for $31.0 million ($238 per sf), resulting in a $46.7 million realized loss on the $65.5 million outstanding balance, representing a 71.0% loss severity. The sale price was below the December 2025 appraised value of $44.2 million ($339 per sf).
The 315 West 36th Street REO asset is a 143,479 sf commercial component of a mixed-use building located in the Midtown neighborhood of the New York City borough of Manhattan. Only the office and retail components, which occupy floors one through 10, serve as collateral. According to the most recent servicer commentary, a foreclosure sale was held in July 2026, with the trust as the winning bidder. The asset was determined to be non-recoverable by the servicer in October 2025. A total of $5.0 million was advanced by the trust in August 2026 and was allocated as a loss to the trust.
The collateral for the 644 Broadway loan consists of a 50,718 sf mixed-use property located in San Francisco, California. The property's largest tenant, China Live Restaurant, stopped paying rent during the COVID-19 pandemic and has not consistently paid rent since. The loan was determined to be non-recoverable by the servicer in October 2025. A total of $2.0 million was advanced by the trust in August and was allocated as a loss to the trust, resulting in cumulative trust advances of $3.6 million associated with this asset.
According to the August 2026 remittance report, cumulative principal losses on the transaction totaled $53.7 million. Following the liquidation of the Kingswood Center asset and the non-recoverable servicer advance reimbursements related to 315 West 36th Street and 644 Broadway, the certificate balances of the non -rated class H-RR and class G-RR were reduced to zero, while the principal balance of class F-RR was reduced to $15.3 million, or 76.0% of its original certificate balance.
KBRA's other outstanding ratings for the transaction are unchanged at this time.
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.
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