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CMBS Special Servicing Sees First Increase Since Q3 2020
Although the CMBS delinquency rate continued to decline in August, Trepp warns that “with a broader recession predicted by economists to take place in 2023, cracks in the CMBS market are likely to appear as 2022 concludes.” As a case in point, the special serving rate for CMBS loans ticked upward even as the delinquency rate declined.
Trepp reported a 13-basis point increase in the special servicing rate overall for August to 4.92%. It’s the first increase since the third quarter of 2020, and represented $2.45 billion in CMBS loans transferred to the special servicer. Six months ago, the rate was 6.08%, and 12 months ago, the rate was 7.79%.
In August 2022, the distress was concentrated in the retail and multifamily sectors, which saw increases of 117 and 67 bps, respectively, to special servicing rates of 11.03% and 1.90%, respectively.
“This month’s large retail transfers were heavily tied to regional and superregional malls that were transferred due to imminent monetary default,” wrote Trepp’s Jack LaForge. “Trepp will be watching these sectors closely to see if similar distress is reflected in next month’s delinquency report.”
Pictured: Santa Monica Place in Santa Monica, CA; a $300-million CMBS loan backed by the property transferred to special servicing in August.
- ◦Financing
- ◦Economy
