KBRA Releases Monthly CMBS Trend Watch

NEW YORK--(BUSINESS WIRE)--KBRA releases the December 2024 issue of CMBS Trend Watch.

U.S. CMBS ended the year on a high note, as issuance exceeded $100 billion—a level experienced only once since the global financial crisis (GFC). Moreover, 2024’s $104.1 billion in issuance marks a year-over-year (YoY) increase of 164.7%. Commercial real estate collateralized loan obligations (CRE CLO) also saw an uptick in issuance and ended the year at $8.7 billion, up 29.9% YoY. The momentum is continuing in 2025, and based on our current visibility, January could see up to 17 rated deals including eight single-borrower (SB), five conduits, three CRE CLO, and one Freddie Mac (Agency).

In December, KBRA published pre-sales for five deals ($4.4 billion) including three conduits ($2.6 billion), one SB ($615 million), and one Agency ($1.2 billion). December’s surveillance activity included rating reviews of 521 securities issued in connection with 41 transactions. Of the 521 ratings, 464 were affirmed, 53 were downgraded, and four were upgraded. In addition, 22 ratings were placed on Watch Downgrade across three deals. The activity was effectuated across 41 transactions including 28 conduits, eight SBs, three Agencies, and two CRE CLO transactions.

The Spotlight section reviews the rating transitions that occurred in 2024. KBRA-rated U.S. CRE securitizations— encompassing traditional CMBS (conduits, SB, large loan (LL)), Freddie Mac K- Series, CRE CLO, and single-family rental (SFR)—experienced record high downgrades in 2024. The downgrades were predominantly concentrated in conduit and SB transactions at non-investment grade (IG) and low IG levels, while other sectors and high IG ratings continued to exhibit greater stability. The continued climb in the CMBS distress rate, which increased 260 bps over the year, contributed to the downgrades. The distress rate, which includes both delinquent loans and loans that are current but with the special servicer, ended 2024 at 9.3%, up from 6.7% the year prior.

Click here to view the report.

Related Publications

• 2025 CMBS Sector Outlook: Twin Peaks?
• Multifamily Performance—Conduit Distress Increases as Freddie Mac Holds the Line
• Metro-Level CRE Loan Distress: Varied Pace of Deterioration
• Data Center MEP: More Than Meets the Eye
• CMBS Loan Performance Trends: December 2024
• CMBS Trend Watch: November 2024

About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU, and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.

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