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CMBS Special Servicing Rate Hits 7-Year High
The Trepp Special Servicing Rate for CMBS increased by 44 basis points in September, to 10.48%. With CMBS loans for retail and hotel reaching the highest special servicing rates on record, the overall rate is the highest since May 2013.
CMBS special servicing rates overall have consistently increased since March, Trepp said. The retail special servicing rate clocked in at 18.32% for September, while lodging came in at 26.04%. Both were single-digit six months ago.
“The difference in the delinquency and special servicing rate trend is based on the fact that while forbearances switch the loan status from delinquent to current, the loans, if stressed, still continue to be specially serviced,” said Jyoti Yadav, Trepp research analyst.
“Considering that a forbearance agreement typically provides short-term respite, the special servicing rate seems to be a better representative of the current state of distress in the CMBS universe,” Yadav added.
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