KBRA Assigns Preliminary Ratings to BX 2025-BIO3

KBRA announces the assignment of preliminary ratings to two classes of BX 2025-BIO3, a CMBS single-borrower securitization.

The collateral for the transaction is a $535.0 million portion of a $765.0 million non-recourse, first lien mortgage loan. The fixed rate loan has a five-year term and requires monthly interest-only payments that are based on an assumed coupon of 6.47%. The loan is secured by the borrowers’ fee simple interest in seven properties and leasehold interest in one property, which together comprise three office buildings (59.8% of loan amount) and five life science lab/office buildings (40.2%). The portfolio contains a total of 1.3 million sf of life science and office space located within four of the largest life science markets in the US across three states, Massachusetts (two properties, 47.5%), California (five, 45.0%), and Washington (one, 7.4%). As of February 2025, the portfolio was 93.6% leased to 25 tenants.

KBRA’s analysis of the transaction included a detailed evaluation of the properties’ cash flows using our North American CMBS Property Evaluation Methodology and the application of our North American CMBS Single Borrower & Large Loan Rating Methodology. In addition, KBRA also relied on its Global Structured Finance Counterparty Methodology for assessing counterparty risk in this transaction, its Methodology for Rating Interest-Only Certificates in CMBS Transactions, and its ESG Global Rating Methodology, to the extent deemed applicable.

The results of our analysis yielded a KBRA net cash flow (KNCF) for the property of approximately $63.7 million, which is 18.3% below the issuer's NCF, and a KBRA value of approximately $785.7 million, which is 39.1% below the appraiser’s aggregate as-is values. The resulting in-trust KBRA Loan to Value (KLTV) is 97.4%. In our analysis of the transaction, we also reviewed and considered third party engineering, environmental, and appraisal reports, the results of our property site inspections, and legal documentation review.

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Methodologies