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Office Leads as CMBS Special Servicing Rate Increases in January
Led by debt tied to office properties, the Trepp CMBS Special Servicing Rate climbed 17 basis points in January, reaching 6.95%. After falling slightly in December, the latest rise has brought the rate to its highest level since October 2021.
Performance across property types was a mixed bag, according to Trepp. Three property types saw month-over-month increases or decreases that exceeded 80 basis points. After holding steady for the closing months of 2023, the multifamily rate dropped 83 bps to 2.34% in January 2024.
The property type with the largest increase, and the main driver of the overall rate increase, was the office sector. The office special servicing rate rose 129 bps to 9.74% this month, its highest monthly increase on record. The last time the office rate exceeded its current level was more than a decade ago.
Last month, more than $3.30 billion worth of loans were newly transferred to special servicing. The balance for newly transferred office loans was $2.6 billion alone. For context, in 2023, there were only two months where the newly transferred balance across all property types was greater $2.6 billion.
- ◦Financing
