NEW YORK — Credit rating agency KBRA has released its April 2025 CMBS Trend Watch, offering an in-depth look at market activity and trends in the commercial mortgage-backed securities (CMBS) sector.
The report reflects a notable slowdown in private-label CMBS and commercial real estate (CRE) collateralized loan obligation (CLO) issuance, driven by investor caution amid new government tariffs and broader economic uncertainty.
April saw the pricing of just seven deals totaling $3.3 billion, a significant drop from the 14 deals totaling $10.3 billion that were priced in March. The sudden deceleration followed early-April tariff announcements, which led to the temporary pause of seven expected deals (around $7 billion in volume) that KBRA had anticipated rating during the month.
Despite the lull, KBRA noted that many of those paused deals are now moving forward. Looking ahead, the agency anticipates a stronger May, with visibility into up to 13 deals potentially pricing, including:
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5 single-borrower (SB) transactions
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5 conduit deals
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2 CRE CLOs
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1 Freddie Mac K-Series (Agency) issuance
Still, KBRA cautioned that in the current climate, “the forward-looking monthly number is a moving target and could quickly change.”
Surveillance and Ratings Activity
In terms of ratings, KBRA’s April activity included pre-sales for three deals:
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One conduit deal totaling $628 million
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One Small Balance Commercial (SC) transaction at $392.6 million
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One SB deal valued at $300 million
In its ongoing surveillance of existing securities, KBRA reviewed 444 ratings across 45 transactions, comprising:
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23 conduits
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12 single-borrower deals
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8 agency transactions
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1 re-remic
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1 SC transaction
Among those ratings:
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397 were affirmed (89.4%)
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37 were downgraded (8.3%)
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10 were upgraded (2.3%)
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8 ratings were placed on Watch Downgrade
Research and Market Insight
April’s edition of CMBS Trend Watch also spotlights recent KBRA research publications, which delve into various market issues and emerging risks affecting CRE and structured finance sectors.
While economic headwinds persist, the April report suggests the CMBS market is showing early signs of regaining momentum. Investors and issuers alike will be watching May’s performance closely to gauge the sector’s resilience in a shifting macroeconomic landscape.
For the full April 2025 CMBS Trend Watch report and related research, visit www.kbra.com.
