Press Release|CMBS

KBRA Affirms Ten Ratings and Withdraws Four Ratings for CGCMT 2016-GC37

5 Mar 2026 | New York

KBRA withdraws one rating and affirms all other ratings for CGCMT 2016-GC37, a $152.2 million CMBS conduit transaction with 10 loans remaining in the pool. The affirmations follow a surveillance review of the transaction, which has exhibited performance generally in line with KBRA’s last ratings change in March 2025. Although the transaction has benefited from increased certificate C/E levels due to deleveraging from loan payoffs, this is offset by near-term maturity risk and a high concentration of K-LOCs. KBRA withdraws the rating on Class A-S following the reduction of the principal balance to zero as reflected in the February 2026 remittance report.

Along with the affirmations and withdrawal of the ratings of 11 outstanding classes, KBRA subsequently withdraws the ratings of 3 classes of interest-only (IO) certificates in accordance with KBRA's Methodology for Rating Interest-Only Certificates, as there are 10 loans remaining in the pool.

As of the February 2026 remittance period, there are four specially serviced loans (21.3%), of which three (14.9%) are non-performing matured. KBRA identified all 10 remaining loans (100%) as K-LOCs. Of the K-LOCs, five (65.6%) have estimated losses. Details of these loans are outlined below.

79 Madison Avenue ($40.0 million, 26.3%, K-LOC, Specially Serviced, Current, Performing Matured Balloon)

The loan is collateralized by a 274,084 sf, Class-B office building located in the New York City borough of Manhattan.
KBRA maintains the loan’s K-LOC designation and KPO of Underperform due to a significant decline in financial performance since issuance as well as the loan’s failure to pay off at the scheduled January 2026 maturity. The decline in performance is largely primarily due to WeWork, the largest tenant, reducing its footprint from 205,667 sf to 97,667 sf. In February 2026, the borrower was granted a 180-day forbearance extending the maturity to July 2026. As of February 2026, there is $4.7 million in an Excess Cash Flow reserve.
The servicer-reported occupancies and DSCs are: 42.0% / -0.39x (YTD September 2025), 42.0% / 0.25x (FY 2024), 68.0% / 1.09x (FY 2023); at issuance these were 98.0% / 1.52x. KBRA’s analysis resulted in an estimated loss of $25.4 million (29.9% estimated loss severity) on a whole loan balance of $85.0 million, of which $12.0 million is allocated to this trust. The loss is based on a KBRA liquidation value of $59.8 million ($218 per sf) and projected total exposure of $85.2 million. The value considers a distressed non-stabilized disposition of the asset.

Hotel on Rivington ($33.7 million, 22.2%, K-LOC, Current)

The loan is collateralized by a 20-story, 109-key, full-service hotel located in the Lower East Side neighborhood of the borough of Manhattan.
KBRA maintains the loan’s K-LOC designation and KPO of Underperform due to a decline in financial performance and upcoming loan maturity. For FY 2024, the servicer reported NCF was $2.1 million which represents a 36.4% decline from the $3.4 million underwritten at closing. However, based on the servicer reported TTM September 2025 NCF of $3.5 million, performance has shown signs of recovery, primarily driven by an increase in occupancy and ADR.
As of the TTM period ending September 2025 STR report, the hotel had an occupancy rate of 73.6%, ADR of $289.60, and RevPAR of $213.15, compared with 64.4%, $267.04 and $171.97 at last review and 78.5%, $296.47, and $232.79, at securitization. As evidenced by the subject’s RevPAR penetration rate of 74.2%, the hotel is currently underperforming its competitive set.
The servicer-reported occupancies and DSCs are: 74.0% / 1.49x (TTM September 2025), 68.0% / 0.79x (FY 2024), 60.0% / -0.12x (FY 2023); at issuance these were 76.2% / 1.42x. At this time, KBRA does not estimate a loss on this asset.

5 Penn Plaza ($25.0 million, 16.4%, K-LOC, Current)

The loan is collateralized by a 650,329 sf, Class-B office building located in the Penn Station section of Manhattan. The 26-story building was constructed in 1917 and includes 17,180 sf of ground-level retail space (2.6% of collateral sf).
KBRA maintains the loan’s K-LOC designation and KPO of Underperform based on the loan’s decline in performance and failure to pay off at maturity. The loan transferred to the special servicer in November 2024 due to imminent monetary default. It was modified in November 2025, and terms included a two-year maturity extension to January 2028, a one-time 12-month forbearance option at the extended maturity date, an equity contribution of approximately $9.0 million, and the setup of cash management, among other items. According to the June 2025 rent roll the property was 85.0% leased. After accounting for the impending departure of the property’s second-largest tenant, Thomas Publishing Company (13.9% of collateral sf), which vacated at lease expiration in December 2025, the property was 71.1% leased.
The servicer-reported occupancies and DSCs are: 85.0% / 0.92x (YTD September 2025), 85.0% / 1.32x (FY 2024), 79.0% / 0.75x (FY 2023); at closing these were 97.2% / 1.68x. KBRA’s analysis resulted in an estimated loss given default of $57.4 million (22.1% estimated loss severity) on a whole loan balance of $260.0 million, of which $5.5 million is allocated to this trust. The loss is based on a KBRA liquidation value of $202.7 million ($308 per sf) and projected total exposure of $260.1 million. The value is derived from a direct capitalization approach using a KNCF of $16.8 million, assuming an occupancy rate of 71.1%, which is consistent with physical occupancy, and a capitalization rate of 8.29%.

Park Place ($17.6 million, 11.6%, K-LOC, Specially Serviced, Nonperforming Matured Balloon)

The loan is collateralized by a 523,673 sf, suburban office complex located in Chandler, Arizona, approximately 21 miles southeast of the Phoenix CBD. Built in 2009, the development comprises six, two-story buildings, of which only one is configured for multi-tenant use.
KBRA maintains the loan’s K-LOC designation and KPO of Underperform based on its status with the special servicer. The loan transferred to the special servicer in October 2025 due to imminent maturity default ahead of its January 2026 maturity. However, prior to the loan’s transfer to special servicing, collateral occupancy declined significantly. According to the June 2025 rent roll, the office complex was 58.8% leased. The former largest tenant, Keap (50.0% of collateral sf at securitization), reduced its footprint as four of its five leases expired. The tenant’s remaining lease (17.8% of collateral sf) expires in December 2026. The loan had $10.8 million in reserves as of February 2026.
The servicer-reported occupancies and DSCs are: 58.8% / 0.71x (YTD September 2025), 79.0% / 1.30x (FY 2024), 81.0% / 1.45x (FY 2023); at closing these were 100% / 1.44x. KBRA’s analysis resulted in an estimated loss of $9.7 million (11.8% estimated loss severity) on a whole loan balance of $82.0 million, of which $2.1 million is allocated to this trust. The loss is based on a KBRA liquidation value of $75.1 million ($143 per sf) and projected total exposure of $84.7 million. The value is derived from a direct capitalization approach using a stabilized KNCF of $6.1 million, an occupancy rate of 63.0%, reflective of the Mesa/Chandler office submarket (REIS) increased to account for near-term lease roll, and a capitalization rate of 9.75%.

The Armitage Collection ($9.7 million, 6.4%, K-LOC, Specially Serviced, Current, Performing Matured Balloon)

The loan is collateralized by a 32,604-sf retail building located in Chicago, Illinois, approximately five miles north of downtown Chicago.
KBRA identified the loan as a K-LOC and assigned a KPO of Underperform following its transfer to special servicing in January 2026, after failing to pay off at its January 2026 maturity date. The transfer followed a material decline in occupancy, driven by Salon 1800 vacating at lease expiration in June 2025. According to the September 2025 rent roll, the office complex was 69.0% leased. According to the special servicer, the borrower is actively marketing the vacant space while pursuing a loan modification and maturity extension.
The servicer-reported occupancies and DSCs are: 69.0% / 1.06x (YTD September 2025), 100% / 1.12x (FY 2024), 88.0% / 1.11x (FY 2023); at closing these were 100% / 1.20x. KBRA’s analysis resulted in an estimated loss of $1.4 million (14.1% estimated loss severity) on a whole loan balance of $9.7 million. The loss is based on a KBRA liquidation value of $8.3 million ($255 per sf) and projected total exposure of $9.7 million. The value considers a distressed non-stabilized disposition of the asset.

Franklin Center ($7.5 million, 4.9%, K-LOC, Current)

The loan is collateralized by a 96,514-sf, Class B suburban office property located in Southfield, Michigan approximately 21 miles northwest of Detroit.
KBRA identified the loan as a K-LOC and assigned a KPO of Underperform due to the loan’s near-term lease rollover risk, declining financial performance, and upcoming March 2026 maturity. According to the September 2025 rent roll, leases representing 45.1% of base rent, inclusive of MTM leases, are scheduled to expire in 2026, including four of the top five tenants. The servicer-reported annualized YTD September 2025 NCF was $641,000, representing a 32.5% decrease from $949,631 underwritten by the issuer at closing.
The servicer-reported occupancies and DSCs are: 82.0% / 1.08x (YTD September 2025), 83.0% / 1.29 (FY 2024), 72.0% / 0.85x (FY 2023); at closing these were 91.9% / 1.60x. KBRA’s analysis resulted in an estimated loss given default of $4.5 million (59.6% estimated loss severity) on a whole loan balance of $7.5 million. The loss is based on a KBRA liquidation value of $3.5 million ($36 per sf) and projected total exposure of $7.9 million. The value is derived from a direct capitalization approach using a KNCF of $355,242 and a capitalization rate of 10.25%.

The four remaining K-LOCs represent 12.3% of the pool balance. KBRA does not estimate a loss on these assets at present.

Details concerning the ratings affirmations are as follows:

Class B at AA- (sf)
Class EC at A- (sf)
Class C at A- (sf)
Class D at BBB- (sf)
Class E at B- (sf)
Class F at CCC (sf)
Class G at CC (sf)
Class X-A at AAA (sf)
Class X-B at AAA (sf)
Class X-D at BBB- (sf)

Details concerning the withdrawn ratings are as follows:

Class A-S from AAA (sf) to WR (sf)
Class X-A from AAA (sf) to WR (sf)
Class X-B from AAA (sf) to WR (sf)
Class X-D from BBB- (sf) to WR (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 asset in the transaction, as well as the continuing magnitude and extent of interest shortfalls on the certificates.

To access ratings and relevant documents, click here.

Related Publication

CMBS: CGCMT 2016-GC37 Pre-Sale Report

KBRA Affirms Ten Ratings and Withdraws Four Ratings for CGCMT 2016-GC37

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Methodologies