DBRS Morningstar Upgrades Ratings on Three Classes of Wells Fargo Commercial Mortgage Trust 2016-C37.
ENPNewswire-January 13, 2022--DBRS Morningstar Upgrades Ratings on Three Classes of Wells Fargo Commercial Mortgage Trust 2016-C37
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Release date- 12012022 - DBRS, Inc. (DBRS Morningstar) upgraded its ratings on three classes of the Commercial Mortgage Pass-Through Certificates, Series 2016-C37 issued by Wells Fargo Commercial Mortgage Trust 2016-C37 as follows.
Class X-B to AA (high) (sf) from AA (sf)
Class B to AA (sf) from AA (low) (sf)
Class C to A from A (low) (sf)
In addition, DBRS Morningstar confirmed its ratings on the following classes:
Class A-3 at AAA (sf)
Class A-4 at AAA (sf)
Class A-5 at AAA (sf)
Class A-S at AAA (sf)
Class A-SB at AAA (sf)
Class X-A at AAA (sf)
Class X-D at A (low) (sf)
Class D at BBB (high) (sf)
Class E at BBB (sf)
Class X-EF at BBB (sf)
Class F at BBB (low) (sf)
Class X-G at BBB (low) (sf)
Class G at BB (high) (sf)
Class X-H at BB (low) (sf)
Class H at B (high) (sf)
With this review, DBRS Morningstar has changed the trend on Classes X-H and H to Stable from Negative. All other trends are Stable.
The rating upgrades and confirmations and the trend changes are primarily reflective of the increased credit enhancements as a result of the payoffs of two of the largest loans in the pool since DBRS Morningstar's last review. The Quantum Park (Prospectus ID#2) and Walmart Shadow Anchored Portfolio (Prospectus ID#3) loans represented a combined 12.2% of the trust balance at issuance and repaid in October and September 2021, respectively. As of the December 2021 remittance, 59 of the original 63 loans remain in the pool, with a collateral reduction of 19.9% as a result of loan paydown and scheduled amortization. There were 17 loans, representing 41.7% of the pool, that are being monitored on the servicer's watchlist, with no loans in special servicing. Additionally, there were four loans representing 6.5% of the pool that were defeased. DBRS Morningstar also notes that the pool has a significant concentration of retail and hospitality properties, representing 28.4% and 22.7% of the current pool balance, respectively.
The largest loan on the servicer's watchlist remains Hilton Hawaiian Village (Prospectus ID#1, 8.7% of the pool) which is secured by a 2,860-key full-service hotel, with roughly 1,000 square feet (sf) of ocean frontage on Waikiki Beach, in Honolulu, Hawaii. The loan was added to the servicer's watchlist in December 2020 after steep declines in...
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