So it looks like the suspension maxx 2.5 inch leveling kit is the way to go for the 2016 Denali. As seen on Ten4Lou's post, he installed a 305/55r20 on the stock wheels with very little rubbing if at all.
I decided this is the set up I want to mimic. I chose the Toyo Open County RT tires. I feel like the Toyo mud terrain is a little too aggressive and the all terrain is not aggressive enough. Luckily, Toyota makes the RT which is pretty much in between. Unfortunately, I just talked to my local tire shop and there is apparently a nationwide backorder On the Toyo OC RT in the 305/55r20 size. Just my luck.
Toyo does make the tire in a 33x12.5r20. It is pretty much the same height and about ½ inch wider than the metric size. Has anyone installed at 33x12.5r20 on a leveled GMC 1500? I'm wondering if the extra half inch of which will create issue with rubbing.