The Trepp CMBS Special Servicing rate rose to another record in October, climbing 19 basis points to hit 10.84%. The increase in the overall rate was due to a nearly $1-billion increase in the balance of loans in special servicing ($64.7 billion), and a pullback of $2.1 billion in the overall balance, according to Trepp.
Mixed-use saw the largest monthly increase in its special servicing rate, with a 145-bp jump to a 12-year high of 13.40%. This followed a 130-bp increase in September. The lodging rate also rose 70 bps to 10.81%, its highest level since March 2022.
The office special servicing rate jumped 39 bps to another record of 17.30%, clearing 17% for the first time on record, Trepp reported. The only sector to experience a material drop in its special servicing rate was retail, which retreated 37 bps to 11.57%. The remaining property types (multifamily, industrial and “other”) moved modestly, with their respective special servicing rates fluctuating by no more than 12 bps during the month.
The two largest loans to enter special servicing were both mixed-use loans, according to Trepp. The larger of the pair was the $593.6-million 650 Madison Ave. loan, which transferred to special servicing for payment default at the borrower’s request.
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