KBRA Affirms All Ratings for CGCMT 2012-GC8
22 Aug 2025 | New York
KBRA affirms all outstanding ratings for CGCMT 2012-GC8, a $125.6 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction. Two assets remain in the underlying mortgage pool, both of which have been identified as K-LOCs. As of the August 2025 remittance period, Pinnacle at Westchase (50.6%) is REO, while Gansevoort Park Avenue (49.4%) is performing matured with the special servicer after failing to pay off at its June 2024 maturity date. Interest shortfalls continue to affect each outstanding class and advances continue to accumulate as the servicer works through the resolution of the two remaining assets. The details of both loans are outlined below.
Pinnacle at Westchase (50.6%, K-LOC, Specially Serviced, REO)
- The loan is collateralized by a nine-story, 470,940 sf, Class-A office building and five-story parking garage located in Houston, Texas.
- KBRA maintains the loan’s K-LOC designation and its KPO of Underperform based on the asset's REO status. A foreclosure sale occurred in June 2021. Prior to the asset becoming REO, the loan transferred to the special servicer in March 2020 because of a payment default caused by a decrease in occupancy and cash flow. Occupancy declined in 2016 when ConocoPhillips (44.7% of collateral sf, 65.0% of total base rent), vacated its space prior to its July 2019 lease expiration date. Despite vacating the property, ConocoPhillips continued to make its lease payments. In 2020, MHWirth, which occupied 196,501 sf, vacated its space at lease expiration. The sole remaining tenant at the property, Empyrean Benefit Solutions, a benefits administration company, currently leases 108,109 sf under a lease that expired in January 2025. Occupancy was 24.0% as of December 2024. According to REIS, the market and submarket office vacancy rates are 25.8% and 28.4%, respectively, as of April 2025. The asset was deemed non-recoverable in September 2023.
- An updated appraisal dated March 2025 valued the property at $16.2 million ($34 per sf), representing an 86.2% decline from the $117.5 million ($250 per sf) appraisal at origination. In August 2025, the loan reported an ARA of $68.4 million, resulting in a cumulative ASER amount of $5.7 million. The servicer reports occupancies and DSCs are: 24.0% / 0.04x (FY 2024); 24.0% / -0.07x (FY 2023); at issuance these were 95.0% and 1.56x. The property has outstanding advances and cumulative nonrecoverable interest outstanding totaling $6.4 million. KBRA's analysis resulted in an estimated loss of $59.2 million (93.0% estimated loss severity). The loss is based on a KBRA liquidation value of $12.2 million ($26 per sf), which is equal to 75% of the most recent appraisal.
Gansevoort Park Avenue (49.4%, K-LOC, Specially Serviced, Performing Matured)
- The loan is collateralized by a 19-story, 249-key, luxury boutique hotel located in the Gramercy Park/Flatiron neighborhood of Manhattan in New York City. An ownership transfer occurred in December 2017, at which time the transaction was valued at approximately $200.0 million ($803,212/key). In conjunction with the permitted transfer, an entity affiliated with the sponsor at issuance retained an equity stake, a new joint venture of GreenOak Real Estate and Highgate purchased an equity stake, and the hotel was re-branded Royalton Park Avenue. The $20.0 million mezzanine loan was also paid off at that time.
- KBRA maintains the loan’s K-LOC designation and KPO of Underperform based on its performing matured status with the special servicer. The loan transferred to special servicing in June 2024 after the borrower failed to repay the loan at its scheduled June 2024 maturity date. In January 2025, the borrower was granted an 18-month forbearance agreement through December 2025, which retroactively went into effect as of June 2024. Following the agreement, the borrower paid down $8.5 million on the whole loan balance and a cash contribution from the borrower increased the total loan reserves by $3.9 million. The servicer reported NCF for FY 2024 was $4.9 million, representing a 69.4% decline from the issuer's underwritten expectations at issuance. The steady decline in the property’s financial performance is primarily attributable to lower food and beverage income and higher real estate taxes.
- An appraisal dated June 2025 valued the property at $125.4 million ($503,614 per key), representing a 54.9% decrease from the $278.0 million value at issuance ($1.1 million per key). The servicer reported occupancies and DSCs are: 74.0% / -0.57x (YTD March 2025 ); 81.3% / 1.42x (FY 2024); 77.3% / 0.50x (FY 2023); at issuance these were 83.6% and 1.77x. KBRA's analysis resulted in an estimated loss of $62.7 million (49.0% estimated loss severity) on the whole loan balance of $115.7 million. The loss is based on a KBRA liquidation value of $62.7 million ($251,807 per key), which is equal to 50% of the most recent appraisal.
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.
To access ratings and relevant documents, click here.