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KBRA Downgrades Four Ratings and Affirms all Other Outstanding Ratings for JPMCC 2016-JP3

13 Aug 2025   |   New York

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KBRA downgrades the ratings of four classes of certificates and affirms all other outstanding ratings of JPMCC 2016-JP3, a $859.8 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction, which has exhibited a worsening in pool performance since KBRA's last ratings change in August 2024. The rating actions also reflect KBRA's estimated losses for five K-LOCs (20.5% of the pool balance) and the resulting loss adjusted C/E levels.

As of the July 2025 remittance period, there are four specially serviced assets (19.4%), of which three (12.4%) are in foreclosure. KBRA identified 10 K-LOCs (32.2%), including the specially serviced assets. Of the K-LOCs, five (20.5%) have estimated losses. The K-LOCs are depicted in the table below:

K-LOCs Loss Given Default (000s) Loss Severity 5 1 Kaiser Plaza OF 60,000 7.0% Y C N SS 12/04/2024 $7,001 11.7% 04A2EMPC2 Westfield San Francisco Centre MU 60,000 7.0% Y 90+ N Foreclosure 01/24/2022 $57,998 96.7% 8 Crocker Park Phase One & Two MU 37,595 4.4% N C Y DSCR 06/08/2020 - - 10 Laguna Design Center MU 35,585 4.1% N C Y DSCR 06/30/2025 - - 12 National Business Park OF 28,374 3.3% Y 90+ N Foreclosure 11/29/2022 $12,261 43.2% 20 Centrica OF 18,464 2.1% Y 90+ N Foreclosure 11/01/2023 $13,535 73.3% 21 Cicero Marketplace RT 15,587 1.8% N C N DSCR 09/26/2024 - - 35 West LA Office - 1950 Sawtelle Boulevard OF 9,143 1.1% N C N Occupancy 08/23/2021 $3,332 36.4% 33 Doubletree Fayetteville LO 9,113 1.1% N C N DSCR 04/02/2025 - - 50 Holiday Inn Express Canton LO 3,161 0.4% N C Y DSCR 05/30/2023 - - Total K-LOCs $277,021 32.2% $94,126 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. SS Prosp. ID Loan Name Prop Type Current In-Trust Balance (000s) % of Deal Balance Loan Status Mod (Y/N) Primary K- LOC Reason K-LOC Date 1 KBRA Estimated 2
Source: KBRA

Excluding the K-LOCs with estimated losses, the transaction’s WA KLTV is 88.8%, compared to 92.3% at last review and 94.2% at issuance. The KDSC is 2.03x, compared to 1.96x at last review and 2.12x at issuance.

Details concerning the classes with rating changes are as follows:

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

To access ratings and relevant documents, click here.

Click here to view the report.

Related Publication

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.

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