Fitch Ratings has affirmed Cantor Commercial Real Estate Mortgage Trust (CFCRE) series 2016-C4 commercial mortgage pass-through certificates.

The Rating Outlooks for four classes have been revised to Stable from Negative.

RATING ACTIONS

Entity / Debt

Rating

Prior

CFCRE 2016-C4

A-3 12531YAM0

LT

AAAsf

Affirmed

AAAsf

A-4 12531YAN8

LT

AAAsf

Affirmed

AAAsf

A-HR 12531YAP3

LT

AAAsf

Affirmed

AAAsf

A-M 12531YAU2

LT

AAAsf

Affirmed

AAAsf

A-SB 12531YAL2

LT

AAAsf

Affirmed

AAAsf

B 12531YAV0

LT

AA-sf

Affirmed

AA-sf

C 12531YAW8

LT

A-sf

Affirmed

A-sf

D 12531YAE8

LT

BBB-sf

Affirmed

BBB-sf

E 12531YAF5

LT

BB-sf

Affirmed

BB-sf

Page

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VIEW ADDITIONAL RATING DETAILS

KEY RATING DRIVERS

Stable Performance: Overall pool performance and loss expectations remain stable from the prior review and since issuance. Fitch has identified ten Fitch Loans of Concern (21% of the pool balance), including two loans in special servicing (3.0%). Fitch's current ratings incorporate a base case loss of 3.10%.

The Outlook revisions to Stable from Negative reflect the reduction in FLOCs (from 41.0%) since the last rating action, as well as continued stabilization of properties affected by the pandemic and progress toward recovery of loans in special servicing.

Fitch Loans of Concern/Contributors to Loss: The largest Fitch Loan of Concern is the Hyatt Regency St. Louis at The Arch (6.5%) loan, which is secured by a 910-key, full-service hotel in St. Louis, MO. As of TTM February 2022, occupancy, ADR and RevPAR improved slightly to 30.6%, $154 and $47, respectively, from 19.0%, $111 and $21 as of the same period in 2021; however, performance remains below levels reported in 2020, prior to the pandemic as performance is reliant on local demand generators which include Busch Stadium and America's Center Convention Complex. TTM February 2020 occupancy, ADR and RevPAR were 66.3%, $152, and $101, respectively. The hotel was ranked 5 of 5 in its competitive set with respect to RevPAR with a 79.9% penetration rate as of the TTM February 2022 STR report.

Fitch's base case analysis incorporates a 10% stress to the property's YE 2019 NOI reflecting a stressed value of $145,100 per key. Given the loan's low leverage, no losses were applied in the base case; however, an additional sensitivity was incorporated to account for slow recovery into 2021 and underperformance of the subject relative to its competitive set.

The largest contributor to loss is the Home Depot - Elk Grove Village loan (1.5%), which is secured by a 187,145-sf retail shopping center located in Elk Grove, IL. The center is anchored by a Home Depot which occupies 64.1% of the NRA. Home Depot had previously master leased the entire center through January 2020, but did not extend the master lease and renewed only for the occupied portion (64.1%) of the center through 2029. Occupancy for the center declined to 80% from 90% when Aldi (10% of NRA) vacated their previously subleased space in January 2020. Staples remains in their space through April 2026. As of September 2021, NOI DSCR declined to 1.29x from 1.66x at YE 2019. Fitch's analysis incorporates an 18% loss severity reflecting a value of $87 psf.

The next largest contributor to loss is the Marketplace at Kapolei (3.0%) loan, which is secured by a 206,155-sf retail property located in the southwest section of Oahu, in Kapolei City, HI. The subject is shadow anchored by Safeway and Long's Drug. Occupancy declined to 91% in 2020 but has since recovered to 99% as of September 2021. NOI DSCR as of September 2021 was 1.59x as compared with 1.64x at YE 2020. The property has substantial near-term rollover with 29% of leases expiring through the end of 2022. Fitch's analysis reflects a 10% stress to YE 2020 NOI reflecting an 8% loss severity.

Increasing Credit Enhancement (CE): CE has increased since issuance due to amortization and loan repayments, with 10.0% of the original pool balance repaid. The transaction has not realized any losses to date. Interest shortfalls are currently affecting the non-rated class G. Nine loans (33.5%) are full-term IO and the remaining 38 loans (66.5%) are amortizing.

Alternative Loss Consideration: Fitch applied an additional sensitivity scenario on the Hyatt Regency St. Louis at the Arch loan to reflect hotel sector volatility and sustained underperformance of the subject relative to its competitive set. However, the additional sensitivity losses did not affect the overall stabilization of pool performance and revision of Outlooks to stable.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to negative rating action/downgrade:

Downgrades would occur with an increase in pool level losses from underperforming or specially serviced loans. Downgrades to the 'AA-sf' and 'AAAsf' categories are not likely due to the position in the capital structure, but may occur should interest shortfalls affect the classes;

Downgrades to the 'BBB-sf' and A-sf' category would occur should overall pool losses increase significantly and/or one or more large loans have an outsized loss, which would erode CE. Downgrades to the 'B-sf' and 'BB-sf' categories would occur should loss expectations increase and if performance of the FLOCs fail to stabilize or additional loans default and/or transfer to the special servicer.

Factors that could, individually or collectively, lead to positive rating action/upgrade:

Factors that could lead to upgrades would include stable to improved asset performance coupled with pay down and/or defeasance. Upgrades of the 'A-sf' and 'AA-sf' categories would occur with significant improvement in CE and/or defeasance and performance improvement of the Hyatt Regency St. Louis at the Arch along with continued stabilization of the pool; however, adverse selection, increased concentrations and further underperformance of the FLOCs could cause this trend to reverse.

Upgrades to the 'BBB-sf' category would be limited based on sensitivity to concentrations or the potential for future concentration. Classes would not be upgraded above 'Asf' if there is likelihood for interest shortfalls. Upgrades to the 'B-sf' and 'BB-sf' categories are not likely until the later years in a transaction and only if the performance of the remaining pool is stable and there is sufficient CE to the classes.

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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