DBRS Confirms All Classes of Wells Fargo Commercial Mortgage Trust 2016-C33

DBRS Limited (DBRS) confirmed all classes of Commercial Mortgage Pass-Through Certificates, Series 2016-C33 issued by Wells Fargo Commercial Mortgage Trust 2016-C33 as follows:

-- 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-SB at AAA (sf)
-- Class A-S at AAA (sf)
-- Class X-A at AAA (sf)
-- Class B at AA (low) (sf)
-- Class X-B at A (sf)
-- Class C at A (low) (sf)
-- Class D at BBB (low) (sf)
-- Class X-D at BBB (low) (sf)
-- Class X-E at BB (sf)
-- Class E at BB (low) (sf)
-- Class X-F at B (sf)
-- Class F at B (low) (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the pool’s underlying collateral since issuance. The collateral consists of 79 fixed-rate loans secured by 112 multifamily properties. As of the March 2018 remittance, there has been collateral reduction of 1.4% since issuance as a result of scheduled loan amortization, with an aggregate outstanding principal balance of $702.3 million. Fourteen of the top 15 loans (which collectively represent 53.3% of the pool) reported YE2016 cash flows with a weighted-average (WA) debt service coverage ratio (DSCR) of 1.80 times (x), up from the WA DBRS Term DSCR at issuance of 1.60x, representing WA net cash flow growth of 17.2% for those loans. All of the loans that reported YE2016 cash flows are reporting a partial-year or a YE2017 cash flow figure, with overall trends showing performance is either stable or improved. The only loan not reporting cash flows in the top 15 is Prospectus ID#11 – Desert Star Apartments (2.1% of the pool), which is being monitored on the servicer’s watchlist for a lack of financial reporting.

Eight additional loans are on the servicer’s watchlist for a total of nine watchlisted loans that cumulatively represent 8.0% of the pool balance. Only two of the watchlisted loans, representing 2.2% of the pool balance, are being monitored for cash flow declines, with the other six loans being monitored for failure to submit financials or deferred maintenance.

Classes X-A, X-B, X-D, X-E, X-F and X-G 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.

As part of this review, DBRS has provided updated analysis and in-depth commentary in the DBRS Viewpoint platform for the following loans in the transaction:

-- 225 Liberty Street (Prospectus ID#3; 5.8% of the pool balance)
-- Parkview at Spring Street (Prospectus ID#9; 2.5% of the pool balance)
-- Desert Star Apartments (Prospectus ID#11; 2.1% of the pool balance)
-- 116 Inverness (Prospectus ID#12; 2.0% of the pool balance)
-- Rk Park Lakes (Prospectus ID#22; 1.5% of the pool balance)

For complimentary access to this content, please register for the DBRS Viewpoint platform at www.viewpoint.dbrs.com. The platform includes issuer and servicer data for the entire commercial mortgage-backed security universe, as well as deal and loan-level commentary for all DBRS-rated transactions.
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.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at info@dbrs.com.

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

The rated entity or its related entities did participate in the rating process for this rating action. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.