Trepp reported that the special servicing rate for multifamily commercial mortgage-backed securities (CMBS) loans moved modestly higher in April, reversing its fall in the month before. The overall CMBS special servicing rate on commercial property rose 6 basis points.
Have multifamily CMBS special servicing rates peaked?
The special servicing rate on CMBS loans on multifamily property rose rapidly from mid-2022 through December 2024 but seems to have reached a plateau in recent months. It rose 28 basis points to 8.59 percent in April, which is still lower than its December level. However, it was 5.1 percent one year ago and only 1.23 percent in July 2022.
The report found that the overall CMBS special servicing rate rose to 10.17 percent, up from 10.11 percent the month before. This rate has been also been trending higher since mid-2022 and may also have reached a plateau, but its leveling off is less pronounced than that for multifamily CBMS as shown in the chart below.
The biggest increase in special servicing rates this month was on that for lodging properties, which jumped 126 basis points to 10.21 percent. This was driven by a few large portfolios transferring to special servicing.
The special servicing rate for retail properties was the second highest gainer for the month with an increase of 32 basis points to 11.53 percent. However, this rate is also still below its level in December.
The rate on CMBS loans on industrial properties rose this month after two months of declines. It was up 9 basis points to 0.69 percent. While still low, this is the highest level it has been in years.
The rate on office properties fell again this month after reaching a 25-year high in February. It was down 67 basis points to 14.91 percent. However, it is up by the largest amount over the last year of the property types tracked by Trepp with a rise of 427 basis points over that time.
The special servicing rate on mixed-use properties also fell this month. It edged lower by 8 basis points to 12.29 percent. It is up 404 basis points over the last year.
The full Trepp special servicing rate report can be found here.
