Press Release|CMBS
View PDF

KBRA Downgrades Five Ratings and Affirms One Rating for CGCMT 2014-GC25

26 Aug 2025   |   New York

Contacts

KBRA downgrades the ratings of five classes of certificates and affirms one rating for CGCMT 2014-GC25, a $172.6 million CMBS conduit transaction. Simultaneously, KBRA removes six classes from Watch Downgrade (DN), where they were placed on May 27, 2025. The rating actions are driven by an increase in KBRA's estimated losses for two (79.3%) of the remaining four assets in the pool. We also considered the magnitude, recoverability and ongoing likelihood of continued interest shortfalls across the capital structure as the special servicer works to resolve the non-performing assets. The servicer has already made a non-recoverable determination for one loan (16.1%).

As of the August 2025 remittance period, three loans (83.9% of the pool balance) have a non-performing matured balloon status with the special servicer, while one (16.1%) is in foreclosure with the special servicer. The details of the assets are outlined below.

Bank of America Plaza (largest, 63.7% of the pool balance, K-LOC, Specially Serviced, Matured Non-Performing)

  • The loan is collateralized by a 55-story, LEED gold certified Class-A office building located on Bunker Hill in the Los Angeles CBD. The building totals 1.4 million sf and has nine levels of underground parking and over 24,000 sf of retail space.
  • KBRA maintains the loan's K-LOC designation based on its non-performing matured status with the special servicer as of August 2025, and heightened risk surrounding the sponsor Brookfield DLTA Holdings LLC. The loan failed to pay off at its September 2024 maturity. According to Midland Loan Services commentary, the special servicer is dual tracking modification discussions and other workout remedies. Cash management is currently in effect. In addition, the subject's third largest tenant Sheppard, Mullin, Richter & Hampton LLP (14.7% of total base rent, 12.9% of collateral sf), vacated since last review, dropping physical occupancy to 66.8%, compared to 80.7% at last review and 89.5% at closing.
  • The servicer-reported occupancies and DSCs are: 67.0% / 1.61x (YTD March 2025), 79.0% / 2.04x (FY 2024), 86.0% / 2.23x (FY 2023); at closing these were 89.5% / 2.08x. The subject was reappraised for $212.5 million ($148 per sf) in December 2024, which is 64.8% below the $605.0 million ($422 per sf) value at issuance. As a result, an ARA of $202.7 million was assigned to the loan in January 2025, of which $55.7 million was allocated to the CGCMT 2014-GC25 transaction. The ARA resulted in a cumulative ASER of $575,517 for this transaction. KBRA's analysis resulted in an estimated loss of $241.5 million on a whole loan balance of $400.0 million (60.4% estimated loss severity). The loss is based on a KBRA liquidation value of $170.0 million ($119 per sf). The value is derived from a direct capitalization approach using a KNCF of $17.0 million and a capitalization rate of 10.00%.

The Pinnacle at Bishop's Woods (2nd largest, 16.1%, K-LOC, Specially Serviced, Foreclosure)

  • The loan is collateralized by three- and four-story Class-A office buildings containing a total of 248,175 sf. The property is located in Brookfield, Wisconsin, approximately 10 miles west of the Milwaukee CBD.
  • KBRA maintains the loan's K-LOC designation and KPO of Underperform due to its foreclosure status with the special servicer following its failure to pay off by the scheduled maturity date of July 2024. The property was transferred to a receiver, which addressed various life safety issues. The receiver attempted to lease and stabilize the property but has been unable to do so. The lender holds a summary judgment and is pursuing foreclosure. The borrower's right to redemption ends in September 2025. The lender plans to market the asset for sale immediately post-foreclosure.
  • The servicer-reported occupancies and DSCs are: 57.0% / 0.54x (YTD March 2025), 57.0% / 0.54x (FY 2024); at issuance these were 94.9% / 1.52x. An appraisal dated December 2024 valued the property at $19.5 million ($79 per sf), which is 57.0% lower than the $45.3 million ($182 per sf) appraised value at issuance. As a result, the asset carries an ARA of $11.9 million, resulting in a cumulative ASER of $590,742. KBRA’s analysis resulted in an estimated loss of $11.3 million (40.7% estimated loss severity). The loss is based on a KBRA liquidation value of $17.9 million ($72 per sf). The value considers a distressed non-stabilized disposition of the asset.

Stamford Plaza Portfolio (3rd largest, 15.6%, K-LOC, Specially Serviced, Matured Non-Performing)

  • The loan is collateralized by a 982,483 sf, high-rise office campus located in downtown Stamford, Connecticut, approximately 40 miles northeast of New York City. The subject is comprised of four 15- and 16-story buildings developed between 1979 and 1986 and renovated between 1993 and 1996.
  • KBRA maintains the loan’s K-LOC designation and KPO of Underperform based its non-performing matured status with the special servicer. The loan transferred to the special servicer in August 2024 when it failed to pay off at maturity. The loan is currently in cash management and the borrower has engaged a workout advisor while the special servicer evaluates workout options, including foreclosure. The portfolio is located within the Bridgeport-Stamford-Norwalk MSA which benefits from its proximity to New York City; however, the subject property has seen a downturn in leasing activity since 2017. According to REIS, the Stamford CBD submarket vacancy rate is 24.8% as of Q1 2025. Lease rollover at the property through YE 2025, inclusive of MTM leases, represents 8.1% of base rent and 5.4% of collateral sf across 13 leases.
  • The servicer reported occupancies and DSCs are: 62.9% / 0.57x (FY 2024); 68.9% / 0.58x (FY 2023); at closing these were 88.0% / 1.38x. An updated appraisal dated October 2024, valued the asset at $150.7 million ($88 per sf), which represents a 64.7% decline from its $427.2 million value ($153 per sf) at issuance. As a result, the asset carries an aggregate ARA of $116.7 million on the whole loan balance, of which $13.7 million is attributable to the CGCMT 2014-GC25 securitization. The ARA for this transaction resulted in a cumulative ASER of $158,884. KBRA’s analysis resulted in an estimated loss of $173.8 million (71.7% estimated loss severity) on the whole loan balance of $242.4 million. The loss is based on a KBRA liquidation value of $85.6 million ($50 per sf), which was derived from a direct capitalization approach using a KNCF of $7.7 million and a capitalization rate of 9.00%.

Arrowhead Properties (4th largest, 4.5%, K-LOC, Specially Serviced, Matured Non-Performing)

  • The loan is secured by the borrower's fee interest in three adjacent two-story office buildings totaling 118,422 sf.The collateral is located in Maumee, Ohio, approximately 10 miles southwest of Toledo. Built in 1986 and renovated in 2004, the property benefits from easy access to I-475, the major western bypass of Toledo.
  • KBRA maintains the loan's K-LOC designation and KPO of Underperform due to weak collateral performance and its matured non-performing status with the special servicer. The asset was reported to be 89.8% leased by the issuer at closing; however, occupancy has dropped year over year since and was reported as low as 28.0% at year-end 2023. Occupancy rebounded to 52.6% as of March 2025; however, collateral performance is well below breakeven and the loan transferred to the special servicer ahead of its maturity default in September 2024. The lender is negotiating with the borrower for a discounted payoff which is expected to close in Q3 2025.
  • The servicer-reported occupancies and DSCs are: 53.0% / 0.38x (YTD March 2025); 53.0% / - 0.07x (FY 2024); 28.0% / -0.15x (FY 2023); at closing these were 89.8% / 1.60x. KBRA’s analysis resulted in an estimated loss of $2.4 million (31.0% estimated loss severity). The loss is based on a KBRA liquidation value of $6.0 million ($51 per sf), which was derived from a direct capitalization approach using a stabilized KNCF of $598,251 and a capitalization rate of 9.50%. KBRA applied a downward adjustment of $314,788 to account for one year of downtime.

Details concerning the classes with ratings adjustments are as follows:

  • Class B to BBB- (sf) from AA (sf) DN
  • Class PEZ to CCC (sf) from BBB (sf) DN
  • Class C to CCC (sf) from BBB (sf) DN
  • Class D to CC (sf) from CCC (sf) DN
  • Class E to C (sf) from CC (sf) DN

Rating Sensitivities

Future rating actions will be dependent upon the ongoing assessment of the timing and likelihood of ultimate payment of principal and accrued interest on the rated certificates. The assessment will consider the expected and actual losses on the remaining assets in the transaction, as well as, the magnitude and extent of interest shortfalls, if any, on the certificates.

To access ratings and relevant documents, click here.

Related Publications

Methodologies

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1010938