KBRA Downgrades Eight Ratings and Affirms All Other Ratings for CGCMT 2016-GC36
5 Dec 2024 | New York
KBRA downgrades the ratings of eight classes of certificates and affirms all other outstanding ratings for CGCMT 2016-GC36, a $1.0 billion CMBS conduit transaction, which has exhibited an increase in estimated losses compared to KBRA’s last rating adjustments in January 2021. The rating actions are primarily driven by an increase in our estimated loss for 5 Penn Plaza (largest, 11.3% of the pool balance), which transferred to the special servicer during the November 2024 remittance period. Additionally, three other top 10 loans (14.8%), which are identified as K-LOCs, have estimated losses.
As of the November 2024 remittance period, there are two (19.9%) specially serviced assets. KBRA identified eight assets (36.0%) as K-LOCs, including the specially serviced assets. The K-LOCs include six top 10 loans (33.1%):
- 5 Penn Plaza (largest, 11.3% of the pool balance, 24.8% estimated loss severity)
- Glenbrook Square (4th largest, 8.7%, 54.0%)
- Park Place (6th largest, 4.4%)
- King of Prussia Hotel Portfolio (8th largest, 3.2%, 43.0%)
- South Plains Mall (9th largest, 2.9%, 22.1%)
- Stafford Park (10th largest, 2.6%)
One other K-LOC has an estimated loss:
- Northeast Corporate Center (2.2%, 6.3%)
The remaining K-LOC (0.8%) does not have an estimated loss.
Excluding the K-LOCs with estimated losses, the transaction’s WA KLTV is 93.7%, compared to 113.4% at KBRA's last ratings change in January 2021 and 101.4% at securitization. The KDSC is 1.64x, compared to 1.51x at KBRA's last ratings change and 1.73x at securitization.
Details concerning the classes with rating changes are as follows:
- Class B to A+ (sf) from AA (sf)
- Class C to BBB- (sf) from A- (sf)
- Class EC to BBB- (sf) from A- (sf)
- Class D to CCC (sf) from BB (sf)
- Class E to CC (sf) from B (sf)
- Class F to C (sf) from CCC (sf)
- Class G to C (sf) from CC (sf)
- Class X-D to CCC (sf) from BB (sf)
To access ratings and relevant documents, click here.
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