KBRA Releases Monthly CMBS Trend Watch

NEW YORK–(BUSINESS WIRE)–#creditratingagency–KBRA releases the December 2025 issue of CMBS Trend Watch.

U.S. CMBS finished the year at $125.8 billion—its highest issuance level since the global financial crisis (GFC)—with a year-over-year (YoY) increase of 18.6%, and in line with our 2025 forecast of $120 billion. Contributing to the increase was the continuing strong investor appetite for single-borrower (SB) deals at $91.1 billion, which accounted for 72.5% of issuance, with the remaining represented by conduits. Commercial real estate (CRE) collateralized loan obligation (CLO) issuance ended the year at $30.6 billion, about 3.5x the 2024 level, and nearly double our forecast. This momentum is continuing in 2026—January, based on our current visibility, could see up to 22 deals including nine SB, six conduit, six CRE CLO, and one Freddie Mac (Agency).

In December, KBRA published pre-sales for eight deals ($5.6 billion) including four conduits ($2.9 billion), one SB ($300 million), one CRE CLO ($951 million), one Agency ($914 million), and one small-balance commercial (SC) ($450.6 million). December’s surveillance activity included rating reviews of 609 securities issued in connection with 55 transactions. Of the 609 ratings, 541 were affirmed (88.8%), 63 were downgraded (10.3%), and five were upgraded (0.8%). In addition, 25 ratings were placed on Watch Downgrade (DN). The activity was effectuated across 55 transactions including 39 conduits, 11 SBs, and five Agency.

The Spotlight section reviews the rating transitions that occurred in 2025. KBRA-rated U.S. CRE securitizations experienced another year of elevated downgrades in 2025. Downgrades were concentrated in conduit (83.3% of total) and SB (11.2%) transactions at non-investment grade (IG) and low IG rating categories, with some high IG classes impacted as well. The CMBS loan distress rate, which includes delinquent loans and current-but-specially-serviced loans, increased 130 bps YoY across KBRA’s rated transactions, and was a contributing factor in the downgrades. The distress rate was 10.6% at year-end, up from 9.3% at year-end 2024 and from 6.7% at year-end 2023. The office distress rate jumped another 160 bps to 16.4% from 14.8% the year prior, and was once again the main cause of the increase in the overall distress rate.

Click here to view the report.

Recent Publications

• Single-Borrower CMBS Default and Loss Study: Shaped by Unprecedented Events
• 2026 U.S. CMBS Outlook: Issuance Momentum Builds; Loan Distress Remains Elevated
• Self-Storage: The Shifting Landscape
• CMBS Servicer Advances: Curtailments Accelerate
• Conduit CMBS Default and Loss Study Update: 2.0 Begins to Make Its Mark
• Conduit Subordination: Follow the Credit Metrics
• CMBS Trend Watch: November 2025
• CMBS Loan Performance Trends: December 2025
• KBRA CMBS Loss Compendium Update: December 2025

About KBRA

KBRA, one of the major credit rating agencies, is registered in the U.S., EU, and the UK. KBRA is recognized as a Qualified Rating Agency in Taiwan, and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions.

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Contacts

Larry Kay, Senior Director

+1 646-731-2452

larry.kay@kbra.com

Solomon Mankin, Senior Analyst

+1 646-731-1244

solomon.mankin@kbra.com

Robert Grenda, Managing Director

+1 215-882-5494

robert.grenda@kbra.com

Business Development Contact

Andrew Foster, Senior Director

+1 646-731-1470

andrew.foster@kbra.com