KBRA Affirms All Ratings for GSMS 2016-GS2
8 May 2024 | New York
KBRA affirms all of its outstanding ratings for GSMS 2016-GS2, a $582.9 million CMBS conduit transaction. The affirmations follow a surveillance review of the transaction, which has exhibited stable pool performance since last review. The WA KLTV and KDSC are slightly worse than at securitization but there has been meaningful principal paydown and C/E levels have increased across the capital stack.
As of the April 2024 remittance period, there is one REO asset (1.6% of the pool balance). KBRA identified four K-LOCs (8.0%), including the REO asset. Of the K-LOCs, two (3.9%) have estimated losses.
One of the top 10 loans (3.6%) is a K-LOC:
- Aloft Sunnyvale (7th largest, 3.6%)
Two other K-LOCs have estimated losses (3.9%):
- Cove at Coastal Carolina (2.3% of the pool balance, 21.3% estimated loss severity)
- Iliff Commons Shopping Center (1.6%, 7.9%)
The remaining K-LOC does not have an estimated loss and represents 0.5% of the pool balance.
Excluding the K-LOCs with estimated losses, the transaction’s WA KLTV is 103.0%, compared to 106.1% at last review and 96.4% at issuance. The KDSC is 1.66x, compared to 1.62x at last review and 1.96x at issuance. The worsening in KLTV and KDSC since securitization is in part driven by the payoff of the largest loan at issuance, Veritas Multifamily Pool I ($75.0 million), a low-leveraged IG loan.
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