DBRS Confirms All Classes of Citigroup Commercial Mortgage Trust 2016-C2 Mortgage Trust

DBRS Limited (DBRS) confirmed the ratings on the Commercial Mortgage-Pass Through Certificates, Series 2016-C2 issued by Citigroup Commercial Mortgage Trust 2016-C2 (CGCMT 2016-C2) 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-AB at AAA (sf)
-- Class A-S at AAA (sf)
-- Class X-A at AAA (sf)
-- Class B at AA (sf)
-- Class X-B at A (high) (sf)
-- Class C at A (sf)
-- Class D at BBB (sf)
-- Class X-D at BBB (sf)
-- Class E-1 at BB (high) (sf)
-- Class E at BB (sf)
-- Class E-2 at BB (sf)
-- Class F-1 at BB (low) (sf)
-- Class EF at B (high) (sf)
-- Class F at B (high) (sf)
-- Class F-2 at B (high) (sf)
-- Class G-1 at B (sf)
-- Class EFG at B (low) (sf)
-- Class G at B (low) (sf)
-- Class G-2 at B (low) (sf)

All trends are Stable.

The ratings reflect the overall stable performance of the transaction since issuance. The deal closed in August 2016 with 44 fixed-rate loans for a total trust balance of $609.2 million. As of the August 2018 remittance report, the pool exhibited a collateral reduction of 0.9% since issuance as a result of scheduled loan amortization with a current outstanding trust balance of $603.7 million. All loans reported YE2017 cash flow figures, which resulted in a weighted-average (WA) debt service coverage ratio (DSCR) and WA debt yield of 2.24 times (x) and 10.99%, respectively, compared with the DBRS Term DSCR and DBRS Debt Yield of 1.72x and 9.3%, respectively. The largest top 15 loans in the pool reported a WA DSCR and WA debt yield of 2.34x and 10.88%, respectively.

Seven loans, representing 19.8% of the pool, are secured by hotels, including three of the largest ten loans. The loans backed by hotel properties have a WA DSCR and WA DBRS debt yield of 1.71x and 11.21%, respectively.

As of the August 2018 remittance, there are no loans on the servicer’s watchlist.

At issuance, DBRS shadow-rated the Vertex Pharmaceuticals HQ loan (Prospectus ID#1, 9.9% of the pool balance) as investment grade. DBRS confirmed that the performance of this loan remains consistent with investment-grade characteristics. In addition, DBRS also confirmed the shadow rating of Opry Mills (Prospectus ID#2, 9.9% of the pool balance) as non-investment grade.

Classes X-A, X-B and X-D are interest-only (IO) certificates that reference a single rated tranche or multiple rated tranches. The IO rating mirrors the lowest-rated applicable reference obligation 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:

-- Vertex Pharmaceuticals HQ (Prospectus ID #1, 9.9% of the pool)
-- Opry Mills (Prospectus ID #2, 9.9% of the pool)
-- Honeygo Village Center (Prospectus ID #4, 5.17% of the pool)
-- Staybridge Suites Times Square (Prospectus ID #6, 4.79% of the pool)
-- Jay Scutti Plaza (Prospectus ID #16, 2.72% of the pool)

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 CMBS 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 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.

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.