**CMBS Special Servicing Rate Holds Steady in March; Office Loans Lead at 16.2%**
The Commercial Mortgage-Backed Securities (CMBS) special servicing rate remained virtually unchanged in March at 9.9%, according to data from Morningstar Credit. Office loans continued to be the most impacted segment, with 16.2% of loans by balance currently in special servicing—only a slight decrease from 16.4% in February.
Year-over-year, the office sector has experienced the steepest increase in special servicing, rising by 470 basis points since March 2023. The multifamily sector ranked second, showing a 450 basis point rise over the same period, now standing at 7.1%.
One notable development in the March reporting cycle was the finalized loan modification for Worldwide Plaza, a $940 million asset backed by a two-million-square-foot office tower located at 825 Eighth Avenue in Midtown Manhattan. The modification allows the use of reserve funds to cover both property expenses and debt service commitments.
“With these modifications, the loan is now being returned to the master servicer,” Morningstar Credit stated. “However, risks remain as the largest tenant looks to vacate.”
Pictured: Worldwide Plaza.
