Fitch Ratings has downgraded two classes and affirmed 14 classes of
The Rating Outlook on classes D and X-D have been revised to Negative from Stable.
RATING ACTIONS
Entity / Debt
Rating
Prior
CGCMT 2018-B2
A-1 17327FAA4
LT
AAAsf
Affirmed
AAAsf
A-2 17327FAB2
LT
AAAsf
Affirmed
AAAsf
A-3 17327FAC0
LT
AAAsf
Affirmed
AAAsf
A-4 17327FAD8
LT
AAAsf
Affirmed
AAAsf
LT
AAAsf
Affirmed
AAAsf
A-S 17327FAF3
LT
AAAsf
Affirmed
AAAsf
B 17327FAG1
LT
AA-sf
Affirmed
AA-sf
C 17327FAH9
LT
A-sf
Affirmed
A-sf
D 17327FAJ5
LT
BBB-sf
Affirmed
BBB-sf
Page
of 2
VIEW ADDITIONAL RATING DETAILS
KEY RATING DRIVERS
Increased Loss Expectations: The downgrades and Negative Outlooks reflect the increased loss expectations since Fitch's prior rating action, due to performance declines from the seven Fitch Loans of Concern (FLOCs; 16.8%), primarily the
Largest Contributors to Loss: The largest contributor to loss is the
The second largest contributor to loss is the 3rd & Pine Seattle Retail & Parking loan (3.4% of the pool), which is secured by a leasehold interest in a parking lot/retail property located in an urban infill location within the downtown
The third largest contributor to loss is the One Newark Center loan (3%), secured by a portion of a 418,000-sf office property located in the Newark CBD. The loan's collateral consists of floors 6-22 of an office building and an attached parking garage. Floors 1-5 are owned and occupied by
Occupancy declined to 68% as of
The loan has remained current, however NOI DSCR is low at 1.07x as of YTD
The next largest increase in loss since the last rating action is the
Non-collateral anchors include
Occupancy was 91% as of
Minimal Change to Credit Enhancement (CE): As of the
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative rating action/downgrade:
Sensitivity Factors that lead to downgrades include an increase in pool level losses from underperforming or specially serviced loans erode CE.
Downgrades to classes B and C are not expected due to the generally stable pool performance and expected continued paydown; however, downgrades to these classes may occur should performance of the FLOCs continue to deteriorate.
Downgrades to class D would occur if loss expectations increase significantly and/or if CE is eroded due to realized losses, or if the performance of the FLOCs fail to stabilize.
Further downgrades to the distressed classes E and F would occur if losses are realized and/or if losses become more certain.
Fitch has identified both a baseline and a worse-than-expected, adverse stagflation scenario based on fallout from the
Factors that could, individually or collectively, lead to positive rating action/upgrade:
Upgrades to the 'AA-sf' and 'A-sf' category would likely occur with significant improvement in CE and/or defeasance; however, adverse selection and increased concentrations or the underperformance of larger loans and FLOCs could cause this trend to reverse. Classes would not be upgraded above 'Asf' if there is likelihood for interest shortfalls.
The 'BBB-sf' and 'CCCsf' rated classes are unlikely to be upgraded absent significant performance improvement from
Best/Worst Case Rating Scenario
International scale credit ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit https://www.fitchratings.com/site/re/10111579.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg
Additional information is available on www.fitchratings.com
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