DBRS Confirms Ratings of Citigroup Commercial Mortgage Trust 2016-C3

DBRS, Inc. (DBRS) confirmed the ratings on the following classes of Citigroup Commercial Mortgage Trust 2016-C3 issued by Citigroup Commercial Mortgage Securities Inc.:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class A-3 at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class A-AB at AAA (sf)
-- Class A-S at AAA (sf)
-- Class X-A at AAA (sf)
-- Class X-B at AA (high) (sf)
-- Class B at AA (sf)
-- Class C at A (sf)
-- Class X-D at BBB (sf)
-- Class D at BBB (low) (sf)
-- Class X-E at BB (high) (sf)
-- Class E at BB (sf)
-- Class X-F at BB (low) (sf)
-- Class F at B (high) (sf)

All trends are Stable.

The rating confirmations reflect the overall performance of the transaction, which remains in line with expectations since issuance. The collateral consists of 44 fixed-rate loans secured by 72 commercial properties. As of the October 2017 remittance, the pool has experienced a 1.2% collateral reduction as a result of scheduled loan amortization, with all loans remaining in the pool. At issuance, the transaction had a weighted-average (WA) DBRS Term debt service coverage ratio (DSCR) of 1.95 times (x) and a WA DBRS Debt Yield of 9.3%.

The transaction is concentrated, as the largest ten and 15 loans represent 56.3% and 71.6% of the current pool balance, respectively. Additionally, eight of the top ten loans, representing 47.7% of the current pool balance, are encumbered with pari passu debt. As of the October 2017 remittance, there are two loans on the servicer’s watchlist, representing 1.8% of the current pool balance; however, both loans remain current.

At issuance, DBRS shadow-rated two loans, Potomac Mills (Prospectus ID#6, representing 4.7% of the current pool balance) and Quantum Park (Prospectus ID#8, representing 4.0% of the current pool balance), as investment grade. DBRS confirmed that the performance of both loans remains consistent with investment-grade loan characteristics.

Classes X-A, X-B, X-D, X-E, and X-F are interest-only (IO) certificates that reference a single rated tranche or multiple rated tranches. The IO rating mirrors the lowest-rated reference tranche adjusted upward by one notch if senior in the waterfall.

All ratings will be subject to ongoing surveillance, which could result in ratings being upgraded, downgraded, placed under review, confirmed or discontinued by DBRS.

DBRS has provided updated loan-level commentary and analysis for larger and/or pivotal watchlisted loans, as well as the Top 15 loans, in the DBRS Viewpoint platform. Registration is free. To view these and future loan-level updates provided as part of DBRS’s ongoing surveillance for this transaction, please register or log into DBRS Viewpoint at viewpoint.dbrs.com.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is CMBS North American Surveillance, which can be found on dbrs.com under Methodologies. For a list of the Structured Finance related methodologies that may be used during the rating process, please see the DBRS Global Structured Finance Related Methodologies document on www.dbrs.com. Please note that not every related methodology listed under a principal Structured Finance asset class methodology may be used to rate or monitor an individual structured finance or debt obligation.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

The rated entity or its related entities did participate initially, in the rating process. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities.