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KBRA Downgrades Eight Ratings and Affirms All Other Outstanding Ratings for WFCM 2016-LC24

5 Sep 2025   |   New York

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KBRA downgrades the ratings of eight classes of certificates and affirms all other outstanding ratings of WFCM 2016-LC24, an $842.5 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction, which has exhibited a worsening in pool performance since KBRA's last ratings change in September 2024. The rating actions reflect KBRA's estimated losses and the resulting loss adjusted C/E levels.

As of the August 2025 remittance period, there are three specially serviced assets (8.2% of the pool balance), of which one (5.3%) is in foreclosure and one is REO (2.1%). KBRA identified 14 K-LOCs (25.1%), including the specially serviced assets. Of the K-LOCs, seven (17.4%) have estimated losses. The K-LOCs are depicted in the table below:

K-LOCs Loss Given Default (000s) Loss Severity 4 1140 Avenue of the Americas OF $45,000 5.3% Y 90+ N Specially Serviced 08/31/2021 $41,538 92.3% 5 One Meridian OF $34,654 4.1% N C N DSCR 03/11/2024 $13,613 39.3% 7 Pinnacle II OF $27,000 3.2% N C N Occupancy 05/04/2022 $13,721 50.8% 15 One & Two Corporate Plaza OF $17,330 2.1% Y 90+ N REO 03/05/2019 $18,068 104.3% 16 4100 Alpha Road OF $16,117 1.9% N C N Occupancy 08/04/2021 $525 3.3% 19 Hilton Garden Inn Bothell LO $13,611 1.6% N C N DSCR 04/10/2020 - - 24 2500 East TC Jester Blvd OF $11,751 1.4% N C N Lease Rollover 11/04/2024 - - 27 Hunting Creek Plaza RT $10,745 1.3% N C N Occupancy 07/29/2025 - - 31 Draper Retail Center RT $9,024 1.1% N C N Tenant Issues 03/05/2025 - - 38 Indy Portfolio OF $7,690 0.9% N C N Occupancy 03/14/2024 - - 40 Holiday Inn Hotel & Suites Beaufort LO $6,728 0.8% Y C Y Specially Serviced 06/04/2020 - - 55 Grove Park Center OF $5,135 0.6% N C N DSCR 03/09/2023 $368 7.2% 57 Westland Shopping Center RT $4,448 0.5% N C Y Lease Rollover 07/07/2020 - - 83 3934 FM1960 Road OF $1,936 0.2% N C N DSCR 01/05/2023 $496 25.6% Total K-LOCs $211,169 25.1% $88,328 1. K-LOC Date is the date when the most recent K-LOC was initially determined. 2. Loss Given Default assumes a 100% probability of default (PD). KBRA may determine a lower PD when estimating losses to a transaction. KBRA Estimated 2 Prosp. ID Loan Name Prop Type Current In-Trust Balance (000s) % of Deal Balance SS Loan Status Mod (Y/N) Primary K-LOC Reason K-LOC Date 1
Source: KBRA.com

Excluding the K-LOCs with estimated losses, the transaction's WA KLTV is 81.5%, compared to 85.5% at KBRA's last ratings change in September 2024 and 99.2% at securitization. The KDSC is 2.02x, compared to 2.00x at KBRA's last ratings and above 1.97x at securitization.

Details concerning the classes with rating changes are as follows:

  • Class C to BBB (sf) from A- (sf)
  • Class D to BB- (sf) from BB (sf)
  • Class E to B- (sf) from B (sf)
  • Class F to CC (sf) from CCC (sf)
  • Class G to C (sf) from CC (sf)
  • Class X-D to BB- (sf) from BB (sf)
  • Class X-EF to CC (sf) from CCC (sf)
  • Class X-G to C (sf) from CC (sf)

To access ratings and relevant documents, click here.

Click here to view the report.

Related Publication

Methodologies

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1011133

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