Retail and Office Performance Drive CMBS Special Servicing Rate Down

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Trepp has published its October 2019 CMBS Special Servicing Report that identifies another drop in the special servicing rate.

The number of loans newly transferred to special servicing declined once again this month, with a total of 12 loans sent to special servicing. Together, these loans hold an outstanding balance of $119.8 million.

Trepp, LLC, a leading provider of information, analytics, and technology to the structured finance, commercial real estate, and banking markets, has released its October 2019 CMBS Special Servicing Report. The full report can be accessed here: https://www.trepp.com/instantly-access-october-special-servicing.

The Trepp Special Servicing rate declined by ten basis points to 3.00% in October, continuing the trend of falling special servicing rates over the recent months. The special servicing rate for CMBS 2.0+ notes fell by five basis points. In the legacy CMBS universe, the industrial special servicing rate saw a significant increase of 570 basis points while there was a notable decline seen among the multifamily rate, with a drop of 112 basis points. This led to a net increase of three basis points for the legacy CMBS special servicing rate.

“The number of loans newly transferred to special servicing declined once again this month, with a total of 12 loans sent to special servicing," said Trepp Research Analyst, Jyoti Yadav. “Together, these loans hold an outstanding balance of $119.8 million.”

Retail and office loans accounted for 72% of the total outstanding balance of the newly specially serviced loans. Additionally, the five largest loans sent to special servicing in October had a total balance of $84 million, a 43% decline from the last month.

The $27.5 million DoubleTree Hilton loan was the largest loan newly transferred to special servicing this month. The loan is backed by the 72,506 square-foot hotel located in Cleveland, Ohio. Recent watchlist comments indicate that four new competing hotels had opened over the last few years which added about 1,100 lodging units to the local market.

For additional details, such as historical comparisons and analysis on all major property types download the October 2019 CMBS Special Servicing Report: https://www.trepp.com/instantly-access-october-special-servicing. For daily CMBS and CRE commentary, follow @TreppWire on Twitter.

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Jyoti Yadav
Trepp
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