HT Pre/Pro 7.2 Upgrade???

Honestly the biggest improvement you could possibly make to that system is to trade out all the surround oriented stuff for good two channel, and add a slew of subs. The improvement in sound quality for movies will be astounding. The improvement in bass will be even better. 

Granted this will be a sacrifice because his system will then be much, much better than yours. Sometimes to be a good friend you have to do stuff like that. In the long run, when you hear how much better his system is you can follow in his footsteps. 

Side benefit, you both wind up with money in your pockets after the upgrades. Don't get that too often.

https://systems.audiogon.com/systems/8367

The idea of HT and high end audio being separate is a box they put you in. You just have to think outside the box.

I forgot to mention he is using 2 M&K 350 subs. The bass is enough to rattle the neighbors windows. 

And here we go again with 2 channel slant and bragging.

The B&K stuff was voiced very warm.  Does he want to stay with this sonic signature?  Or does he want something more high resolution with more excitement and snap in the highs?  What is the budget?

Anthem is on sale right now. :)

First off, he won’t be selling anything and converting to a 2 channel system. Please keep this to a 7.2 build. 
His budget is about $1500 but that’s max. Realistically want to be much cheaper. 
He’s open to change but wants it to be comparable or better to the B&K. 

I would tell him to look for a used Marantz AV770x series.  There's several that have come out:

AV7702
AV7702mkii
AV7704
AV7705

There's a used AV7702mkii on usaudiomart for $920:

https://www.usaudiomart.com/details/649608222-marantz-av7702mkii/

The used price on these are usually between $900 and $1500, depending on seller and year/model.  At most, it is going to be a max of 5 years old (7702).

DO NOT get the 7701 model. That uses older analog circuit design.  All the 7702 have HDMI.  These have a very good sized power supply.  They are voiced a little bit warm, so the high frequencies will be softened, but it's all there.  It should be a nice replacement for his B&K.  The audio between all the models is exactly the same.  The only changes are bells & whistles and new functions such as HEOS, DTS-S, Atmos, blutooth, etc.

It's an 11.2 channel processor and it does have 2 separate subwoofer outputs in both RCA and XLR connections.

You can get a higher resolution processor without the warm/soft high frequencies, but you will have to go older or go more expensive.  The older stuff can be good, such as Krell S-1000, but they can have problems playing new formats (even such as playing Dolby Digital from a Bluray).  More expensive means at least $2500 or more.

The Marantz AV7705 is available on Accessories4less.com for $1500.  If it’s me, there’s a very nice used Anthem AVM 60 on eBay for $1950 I’d jump on.  I know it’s a bit above his max, but as he clearly doesn’t upgrade frequently it’s money well spent for the long term IMHO considering the jump in performance, and he gets the excellent ARC room correction as well.  Best of luck.