KBRA Downgrades Three Ratings and Affirms All Other Outstanding Ratings for BENCHMARK 2018-B3
22 Mar 2024 | New York
KBRA downgrades the ratings of three classes of certificates and affirms all other outstanding ratings for BENCHMARK 2018-B3, a $923.9 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction, which has exhibited a worsening in pool performance since securitization. The rating actions also reflect KBRA's estimated losses for four K-LOCs (14.5%) and the resulting loss adjusted C/E levels.
As of the March 2024 remittance period, there are three specially serviced assets (7.8% of the pool balance), of which two (7.4%) are in foreclosure and one (0.4%) is 90+ days delinquent. KBRA identified eight K-LOCs (28.1%), four of which (14.5%) have estimated losses. This includes:
Four of the top 10 non-defeased loans (19.6%):
- 6420 Wilshire (largest, 6.7%, 24.9% estimated loss severity)
- InterContinental San Francisco (7th largest, 4.8%)
- Greystone Park and The Meridian at Deerwood Park (9th largest, 4.1%, 18.0%)
- Rochester Hotel Portfolio (10th largest, 4.0%)
Two other K-LOCs have estimated losses:
- 315 West 36th Street (3.3%, 49.9%)
- The Stimson Building (0.4%, 86.8%)
Excluding the K-LOCs with estimated losses, the transaction's WA KLTV is 101.5%, compared to 109.3% at last review and 101.2% at securitization. The KDSC is 1.62x, compared to 1.63x at last review and 1.76x at securitization.
Details concerning the classes with ratings changes are as follows:
- Class F-RR to BB (sf) from BB+ (sf)
- Class G-RR to B (sf) from BB- (sf)
- Class H-RR to CCC (sf) from B- (sf)
To access rating and relevant documents, click here.
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