CMBS Special Servicing Rate Jumps: Trepp

(Illustration courtesy of Trepp LLC)

Trepp, New York, reported the commercial mortgage-backed securities special servicing rate jumped 17 basis points in March to 7.31%.

“This now marks the fifth straight month of inclines, over which time the rate has increased over 50 basis points,” Trepp said in its March CMBS Special Servicing Report.

The overall CMBS special servicing rate of 7.31% was up from 5.55% one year ago and 6.87% six months ago.

Looking at property types Trepp found “mostly modest increases across the board,” except for lodging properties, where the special servicing rate jumped 48 basis points from February. The retail’s sector’s two basis point decline was the only monthly decrease and the industrial rate remained unchanged.

The report noted new transfers into special servicing were relatively modest at $1.73 billion. “The balance was not dominated by any single property type, but the bulk was spread across three,” Trepp said. Office, retail and lodging properties accounted for $1.45 billion worth of new transfer volume, or about 84% of the total.

Trepp reported the largest loans to transfer into special servicing in March were the $345 million Ashford Portfolio loan and the $235 million Maine Mall loan.

The Ashford Portfolio loan has eight lodging properties with 1,964 rooms. “March 2024 remittance data revealed that the borrower exercised the last of five one-year extension options, pushing the extended maturity,” the report said.

The Maine Mall loan is backed by a retail property, and the commentary indicates the loan transferred due to imminent default caused by the borrower’s inability to pay the loan off at maturity.