2019 Special Servicing Rates

The Trepp Special Servicing rate fell once again in August by three basis points to 3.2 percent.
Source: Trepp

The Trepp Special Servicing rate fell once again in August by three basis points to 3.2 percent. While the rate continues to decline month over month, it’s worth noting that the decrease seen in August is nowhere near as substantial as the decrease that occurred in July (July’s Special Servicing rate declined by 11 basis points month over month). That’s because there was an eight basis point increase in the CMBS 2.0 Special Servicing rate between July and August. It’s worth noting that August’s eight basis point jump is the second largest jump in the CMBS 2.0 Special Servicing Rate in 2019, trailing behind March’s sixteen basis point bump. The number of loans newly transferred to special servicing doubled in August compared to what was recorded in July. Fifty-one loans were newly transferred to special servicing holding a combined balance of $1.08 billion. The retail and office property types accounted for 63 percent of the $1.08 billion worth of newly specially serviced loans.

—Posted on Sep. 24, 2019


Source: Trepp

Over the past few months, we’ve seen a return to normalcy as the Trepp Special Serving rate continued to drop to a new post-crisis low. Back in April, the rate broke its month-over-month trend when it jumped up by 0.11 percent. However, May’s special servicing rate saw an immediate correction after the rate dropped to 3.4 percent. Since May’s correction, the rate has continued to decline month-over-month reaching 3.23 percent in July. The special servicing rate for CMBS 1.0 loans dropped by 45 basis points and the rate for CMBS 2.0+ notes fell by two basis points in the month of July. Both the lodging and office sectors were significant factors this month in pulling the overall rate down–both sectors saw a 22 basis point drop in their respective special servicing rates.

While the overall special servicing rate decreased in July, a total of 25 loans with a collective balance of $346.7 million were newly transferred to special servicing, which was $129.3 million greater than what was added in June. Retail accounted for 45 percent of the newly transferred notes thanks to loans such as the $79.6 million Park Plaza note and the $38.0 million Sarasota Square loan.

—Posted on Aug. 22, 2019


Source: Trepp

After two rollercoaster months of relatively large movements in Trepp’s Special Servicing rate, the market has settled in June with a single basis point drop. Trepp’s Special Servicing rate now sits at 3.4 percent.

A total of 15 loans with a collective balance of $217.4 million were newly transferred to special servicing in June. June’s month-over-month balance was nearly identical to May’s reported value, differing by a mere $0.1 million.

The $69 million Regent Portfolio note was the largest loan transferred to special servicing in June 2019. The loan is secured by 13 mixed use properties situated in New Jersey and Florida. The underlying note was transferred to special servicing after remittance data showed the borrower was 60+ days delinquent.

—Posted on July 23, 2019


Source: Trepp

In April, we reported an 11-basis-point spike in the Trepp Special Servicing rate to 3.5 percent, the first month-over-month increase in the rate since May 2017. However, the reading returned to its previous trend in May as it clocked in at 3.4 percent (lower than both March and April’s respective rates).

Breaking the rate down by property type, all sectors experienced a decline in their respective special servicing rates except industrial, which grew by 18 basis points. However, the decline in the office, retail and lodging rates overcame the growth in the industrial reading, pushing the industry-wide average rate down.

A total of 16 loans totaling $209.2 million were newly transferred to special servicing in May. Two loans backed by Shopko properties—the $49.6 million Shopko Industrial Portfolio and the $27.2 million Shopko Oregon Portfolio—were transferred to special servicing during May.

—Posted on June 20, 2019


Source: Trepp

The Trepp Special Servicing rate jumped 11 basis points higher to 3.5 percent in April. This is the first month-over-month increase in the special servicing reading since July 2018 and is the largest rate hike in the last two years. A key culprit for the overall bump was the 24-basis-point jump in the retail sector’s rate. The special servicing readings for the other four major property sectors also increased. A total of 26 loans totaling $910.2 million were newly transferred to special servicing in April.

The largest notes that were transferred to special servicing in April were the $300 million Destiny USA Phase I loan and the $130 million Destiny USA Phase II loan. Both pieces are collateralized by the Destiny USA superregional mall in Syracuse, New York.

—Posted on May 20, 2019


Source: Trepp

The Trepp Special Servicing Rate fell by 14 basis points to 3.5 percent in February, as we continue to see a steady reduction in the volume of CMBS loans that are in default. An important driver in the decline of the special servicing rate can be attributed to the CMBS 1.0 universe, while the special servicing rate for CMBS 2.0 loans remained relatively stable (down just two basis points month over month).

A total of 30 loans which were flagged as specially serviced in January 2019 were no longer classified as such in February 2019. Those loans were removed from the list because they were either returned to the master servicer or were retired. The special servicing rate is 136 basis points lower year over year. Major reductions in the volume of loans in special servicing occurred in Q3 2018 and Q1 2019.

—Posted on Apr. 19, 2019