Modest Drop in CMBS Special Servicing Rate May Be Misleading If You Don't Read Between the Lines

NEW YORK, Sept. 23, 2019 /PRNewswire-PRWeb/ -- Trepp, LLC, a leading provider of information, analytics, and technology to the structured finance, commercial real estate, and banking markets, has released its August 2019 CMBS Special Servicing Report. The full report can be accessed here: https://www.trepp.com/august-2019-cmbs-special-servicing-thank-you

The Trepp Special Servicing rate fell once again in August by three basis points to 3.22%. 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 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. 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," said Trepp Research Analyst, Dylan Wall. "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% of the $1.08 billion worth of newly specially serviced loans.

The $240.0 million 1500 Market Street note was the clear standout this month as the largest loan newly transferred to special servicing. 1500 Market Street is secured by a 1,759,193 square-foot urban office located in Philadelphia, PA. According to servicer remittance data, a major tenant decided to vacate 14% of the property's net rentable area (NRA). The Borrower was given the opportunity to pay down the loan to meet the required 8.25% debt yield requirement, however, they chose not to.

For additional details, such as monthly rate changes for all major property types, download the August 2019 CMBS Special Servicing Report: https://www.trepp.com/august-2019-cmbs-special-servicing-thank-you. For daily CMBS and CRE commentary, follow @TreppWire on Twitter.

About Trepp
Trepp, founded in 1979, is the leading provider of information, analytics, and technology to the CMBS, commercial real estate, and banking markets. Trepp provides primary and secondary market participants with the web-based tools and insight they need to increase their operational efficiencies, information transparency, and investment performance. From its offices in New York, San Francisco, and London, Trepp serves its clients with products and services to support trading, research, risk management, surveillance, and portfolio management. Trepp is wholly-owned by Daily Mail and General Trust (DMGT). For more information, visit Trepp.com.

SOURCE Trepp