KBRA Downgrades One Rating to D(sf) for JPMCC 2016-JP3 following Realization of Principal Losses
5 Oct 2026 | New York
KBRA downgrades the rating of the class F certificates to D (sf) from C (sf) for JPMCC 2016-JP3, a $301.1 million conduit CMBS transaction, following realized losses taken against its outstanding principal balance resulting from the resolution of the National Business Park asset ($33.0 million trust balance at securitization) as reflected in the September 2026 remittance report.
The National Business Park loan was collateralized by five Class-B suburban office properties containing a total of 450,543 sf that are located within 0.5 miles of one another in Princeton, New Jersey. The property was liquidated in September 2026, with gross sale proceeds totaling $1.2 million, and fess of $7.2 million, resulting in a negative $6.2 million available for distribution and resulting in a loss of $34.5 million (104.7% loss severity of original balance). The loss was above KBRA's expectations as reflected in the August 2026 surveillance report. Realized losses were allocated to the Class NR certificates, which were reduced to zero, and to the F certificates, which were reduced to $5.1 million (33.8% of the original certificate balance).
KBRA's other outstanding ratings for the transaction are unchanged at this time.
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 assets in the transaction, as well as the magnitude and extent of interest shortfalls, if any, on the certificates.
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