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KBRA Downgrades Seven Ratings and Affirms All Other Ratings for GSMS 2019-GC40

1 Jul 2026   |   New York

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KBRA downgrades the ratings of seven classes of certificates and affirms all other outstanding ratings of GSMS 2019-GC40, a $711.8 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction, which has exhibited an increase in estimated losses since KBRA's last review in June 2025. Our estimated losses are primarily attributable to 250 Livingston ($75.0 million, 10.5% of the pool balance, 68.5% estimated loss severity) and Nitya Tower ($30.0 million, 4.0%, 28.9%).

As of the June 2026 remittance period, two loans (13.3% of the pool balance) are specially serviced, of which one (2.8%) is REO and one is 90+ days delinquent (10.5%). KBRA identified eight K-LOCs (28.2%), including the specially serviced assets. Of the eight K-LOCs, four (18.9%) have estimated losses. The K-LOCs are depicted in the table below:

Loss Given Default (000s) Loss Severity 2 250 Livingston MU $75,000 10.5% Y 90+ N Delinquent 03/11/2024 $51,392 68.5% 11 159 Canal Street RT $33,000 4.6% N C N Tenant Issues 09/27/2024 - - 12 Nitya Tower OF $29,450 4.1% N C N DSCR 03/30/2022 $8,504 28.9% 15 57 East 11th Street OF $20,000 2.8% Y 90+ Y Tenant Issues 04/01/2020 $9,010 45.1% 21 Hampton Inn - Phoenix East Mesa LO $11,504 1.6% N C Y Recent Delinquency 06/24/2025 - - 25 Shoppes of Schererville RT $11,000 1.5% N C N Tenant Issues 03/13/2024 - - 27 Wilderness Village Center RT $10,304 1.4% N C N Occupancy 07/30/2025 - - 23 Fairfield Inn & Suites Rehoboth Beach LO $10,201 1.4% N C N DSCR 04/01/2025 $875 8.6% Total K-LOCs $200,459 28.2% $69,781 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 K-LOCs 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

Excluding the K-LOCs with estimated losses, the transaction's WA KLTV is 91.8%, compared to 92.6% at KBRA's last ratings change and 89.5% at securitization. The WA KDSC is 1.93x, compared to 1.96x at KBRA's last ratings change and 2.36x at issuance.

Details concerning the classes with rating changes are as follows:

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

To access ratings and relevant documents, click here.

Click here to view the report.

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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: 1015827