Fitch Ratings has issued a presale report on J.P. Morgan Chase Commercial Mortgage Securities Trust 2016-ATRM commercial mortgage pass-through certificates series 2016-ATRM.

Fitch expects to rate the transaction and assign Rating Outlooks as follows:

--$191,600,000 class A 'AAAsf'; Outlook Stable;

--$67,400,000 class B 'AA-sf'; Outlook Stable;

--$35,000,000 class C 'A-sf'; Outlook Stable;

--$53,000,000 class D 'BBB-sf'; Outlook Stable;

--$347,000,000a class X-CP 'BBB-sf'; Outlook Stable;

--$347,000,000a class X-NCP 'BBB-sf'; Outlook Stable;

--$98,000,000 class E 'BB-sf'; Outlook Stable;

--$81,700,000 class F 'B-sf'; Outlook Stable.

(a) Notional amount and interest-only.

The expected ratings are based on information provided by the issuer as of Jan. 14, 2016. Fitch does not expect to rate the $58,300,000 class G.

The certificates represent the beneficial interest in a trust that holds a five-year, fixed rate, interest-only $585 million mortgage loan secured by the fee and leasehold interests in 30 hotel properties with a total of 7,236 rooms located in 16 states. The sponsor of the loan is Atrium Holding Company. The loan was originated by JPMorgan Chase Bank, National Association (rated 'A+'/'F1'/Stable Outlook).

KEY RATING DRIVERS

Diverse Portfolio: The portfolio exhibits geographic diversity, with 30 properties located across 16 states; no state represents more than 15.2% of portfolio cash flow. The top 10 properties account for approximately 54.0% of the portfolio cash flow and 39.0% of the total keys.

Asset Quality and Age: The thirty properties comprising the portfolio have an average age of 23.5 years (built from 1979-2000) which is considered an older vintage. The portfolio's assets are well maintained, with $258.9 million ($35,785 per key) of capital improvements spent from 2005 through November 2015. In addition, $125.2 million ($17,300 per key) in capital improvements are budgeted through 2020.

High Trust Leverage: Fitch's stressed DSCR and loan-to-value (LTV) ratios for the trust component of the debt are 1.04x and 103.0%, respectively.

National Franchise Flags: Twenty nine of the 30 hotels are franchised with Hilton, Marriott, Intercontinental Hotel Group (IHG), Carlson Rezidor, and Starwood and benefit from their respective loyalty point and reservations systems. The Embassy Suites by Hilton represents the largest brand, with 34.5% of the portfolio's total keys and 47.1% of the portfolio's TTM November 2015 net cash flow (NCF). The remaining brands include Marriott, Renaissance, Holiday Inn, Hilton, Sheraton, Homewood Suites, Hampton Inn & Suites, Crowne Plaza, Radisson and one independently operated hotel.

RATING SENSITIVITIES

Fitch found that the 'AAAsf' class could withstand an approximate 72.5% decrease to the most recent actual net cash flow (NCF) prior to experiencing $1 of loss to the 'AAAsf' rated class. Fitch performed several stress scenarios in which the Fitch NCF was stressed. Fitch determined that a 68.0% reduction in Fitch's implied NCF would cause the notes to break even at a 1.0x debt service coverage ratio (DSCR), based on the actual debt service.

Fitch evaluated the sensitivity of the ratings for class A and found that a 15% decline in Fitch's implied NCF would result in a one-category downgrade, while a 45% decline would result in a downgrade to below investment grade.

The Rating Sensitivity section in the presale report includes a detailed explanation of additional stresses and sensitivities. Key Rating Drivers and Rating Sensitivities are further described in the accompanying presale report. The presale report is available to all investors on Fitch's web site 'www.fitchratings.com'.

DUE DILIGENCE USAGE

Fitch was provided with third-party due diligence information from Ernst and Young, LLP. The third-party due diligence information was provided on ABS Due Diligence Form-15E and focused on a comparison and re-computation of certain characteristics with respect to the mortgage loan and related mortgaged properties in the data file. Fitch considered this information in its analysis, and the findings did not have an impact on our analysis.

Additional information is available at www.fitchratings.com.

JPMCC 2016-ATRM (US CMBS)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=876670

Applicable Criteria

Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions (pub. 27 Aug 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=870009

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

Related Research

JPMCC 2016-ATRM Appendix

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=876820

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=998071

ABS Due Diligence Form 15E 1

https://www.fitchratings.com/creditdesk/press_releases/content/ridf15E_frame.cfm?pr_id=998071&flm_nm=15e_998071_1.pdf

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=998071

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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