National + Distressed Assets | January 16, 2023

Office Dominates New Transfers as CMBS Special Servicing Declines in December

The Trepp CMBS Special Servicing Rate dropped three basis points in December to 5.17%, representing the first decline in the past five months. Six months ago, the rate was 4.91%, and 12 months ago, the rate was 6.75%. The all-time peak was reached in May 2012 at 13.36%.

The December rate declined after four consecutive increases from August to November. In December, three of the five major commercial real estate property types declined, the office sector special servicing rate was unchanged and the industrial sector special servicing rate rose by two bps.

The largest decline occurred in the lodging sector, down 32 bps from November. New special servicing transfers were dominated by office loans. Conversely, it appears that the new list of transfers has been offset by a host of office loans coming out of special servicing, according to Trepp.

Approximately $1.1 billion in CMBS debt was transferred to a special servicer in December. Office transfers made up 85% of the newly transferred balance, while mixed-use comprised 10%.

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About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

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