Kroll Bond Rating Agency (KBRA) predicted “a record year” for CMBS in 2025, with issuance and special servicing volume expected to reach “peak levels not seen since the global financial crisis” of 15 years ago. At the same time, though, KBRA warned that “there will continue to be credit challenges on outstanding CMBS.” 

The delinquency and special servicing rates for CMBS loans are expected to continue on their upward trajectory, KBRA said in a new report. “Negative rating actions doubled year-to-date (YTD) in KBRA-rated CMBS transactions compared to 2023 and our expectations are for further elevated numbers of downgrades next year,” the report stated.  

Additionally, with approximately 32% of the KBRA-rated maturing loans in 2025 taking place in the office sector, rating pressure will continue due to the sector’s valuation declines compounded by their refinancing challenges.  

Overall, KBRA reported, “With the expected dollar volume growth of the specially serviced loans, we could see the special servicing rate surpass that of the prior peak of 10.5%, which came in the wake of the pandemic—the main difference is that the volume of specially serviced loans decreased fairly rapidly after peaking during the pandemic. This time around, we expect longer resolution periods that will push volumes higher.” 

EPR Properties, a net lease REIT specializing in experiential properties, said Monday it had entered into a new amended and restated $1-billion unsecured revolving credit facility. The new facility, maturing on Oct. 2, 2028, replaces the Kansas City, MO-based company’s existing $1-billion facility. 

The new facility provides for an initial maximum principal amount of borrowing availability of $1 billion with an “accordion” feature allowing EPR to increase the total principal available to $2 billion, subject to lender consent. It also reduces the interest rate payable on outstanding loans, eliminates the tangible net worth covenant, modifies the secured debt to total asset value covenant and simplifies the method used to value assets under the facility. 

“This facility strengthens our financial foundation as we invest in experiential properties and demonstrates the confidence of our bank group in our long-term strategy,” said Greg Silvers, president and CEO of EPR.