2021 Special Servicing Rates

The Trepp CMBS Special Servicing Rate declined by 40 basis points in April–the largest improvement in the monthly reading during the coronavirus market crisis–to 9.0 percent.

Source: Trepp

The Trepp CMBS Special Servicing Rate declined by 40 basis points in April–the largest improvement in the monthly reading during the coronavirus market crisis–to 9.0 percent. This is the seventh monthly decrease in that reading since September 2020, when the rate reached a post-GFC peak of 10.5 percent.

With federal plans underway to make vaccinations more widely available in the US and states taking steps to ease lockdown restrictions even further, loan “cures” and special servicing removals should continue at a measurable pace in the coming months.

By property type, the percentage of loans with the special servicer was relatively unchanged month over month except for that of lodging and retail, which registered a 233 and 37 basis point reduction in April. Roughly 21.8 percent of lodging loans and 15.9 percent of retail loans were reported to be in special servicing last month. 

—Posted on May 25, 2021


Source: Trepp
Source: Trepp

The Trepp CMBS Special Servicing Rate fell by 18 basis points month over month to 9.4 percent in March, making it the sixth consecutive decline in the reading since September. As the balance of loans exiting special servicing has exceeded the volume of new loans being transferred in, this has led to the consistent downward trend in overall rates.

The percentage of loans in special servicing moved modestly lower across all property type categories last month. The exception was office, which climbed 17 basis points, due to the transfer of the $300 million loan behind One California Plaza, a 1-million-square-foot office complex in downtown Los Angeles. Retail posted the largest improvement in the monthly reading (-0.4 percent), thanks in part to a $635.7 million reduction in the retail special servicing balance in March compared to February.

Overall, 35 CMBS notes totaling $1.13 billion were newly sent to the special servicer in March, down from $1.19 billion across 51 notes in February. Lodging and retail represented 35 percent and 34 percent of the special servicing transfer balance, respectively. Office accounted for another 26 percent. The $135 million loan backed by the Aruba Marriott Resort in Palm Beach, Fla.; the $127.9 million loan behind Deerbrook Mall in Humble, Texas; and the $111.1 million loan backed by 600 Broadway in Manhattan were among the largest loans that were moved to the special servicing bucket last month.

—Posted on Apr. 26, 2021


Source: Trepp
Source: Trepp

In February, Trepp CMBS Special Servicing rate saw a reduction of 12 basis points, coming in at 9.6 percent, in comparison to 9.7 percent in January. This marks the fifth consecutive monthly decline in special servicing rates. This reduction can be mainly attributed to a significant reduction in CMBS special servicing rate for retail and lodging sector.

Retail special servicing rates which have been on a downhill path since September last year came in at 16.7 percent, a 38-basis point reduction last month. Lodging special servicing rates, which increased by 42 basis points in January, saw a reduction of 26 basis points last month. Office and multifamily special servicing rates saw an increase of five and eight basis points respectively.

The special servicing rate for CMBS 2.0+ notes saw a reduction of five basis points, clocking in at 8.9 percent in February. In terms of the outstanding balance of loans that are currently in special servicing, the total reduced by roughly $164 million to $47.13 billion in February.

—Posted on Mar. 23, 2021


Source: Trepp
Source: Trepp

In January, the Trepp CMBS Special Servicing rate saw a reduction of nine basis points, coming in at 9.7 percent, in comparison to 9.8 percent in December. This marks the fourth consecutive monthly decline in the overall special servicing rate. The drop in January can be mainly attributed to a significant reduction in the CMBS special servicing rate of every property type, besides lodging. The lodging special servicing rate saw an increase of 42 basis points last month. This comes after a reduction in the lodging special servicing rate in December.

The office special servicing rate had the largest reduction of all property types at 19 basis points, followed by industrial at 16 basis points. Considering that office loans comprise the largest balance of all property types in the CMBS universe, the reduction in the office rate has a significant impact on the overall rate. The special servicing rate for CMBS 2.0+ notes saw a reduction of five basis points, clocking in at 8.9 percent in January. In terms of the outstanding balance of loans that are currently in special servicing, the total reduced by roughly $189 million to $47.29 billion in January.

In the legacy CMBS universe, the overall special servicing rate saw a significant reduction of 66 basis points, coming in at 49.9 percent in January. The total outstanding balance of these loans fell to $5.21 billion from $5.47 billion in December. The number of loans newly transferred to special servicing saw a drop in January. A total of 44 loans were sent to special servicers compared to 40 the month before. Together, these loans hold an outstanding balance of $837.4 million. About 55 percent of the new specially serviced loan balance was attributed to lodging CMBS loans followed by retail CMBS loans which accounted for about 36 percent.

—Posted on Feb. 26, 2021

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