**CMBS Special Servicing Rate Sees Decline in August, Led by Lodging and Mixed-Use Sectors**
The Trepp CMBS Special Servicing rate saw a slight retreat in August, falling by 19 basis points to 10.29%. This marks the second consecutive monthly decline following the all-time high recorded in June. Despite the recent dip, the year-over-year comparisons show an overall increase in the special servicing rate across all property types.
A key driver behind the decrease in August’s headline rate was a notable drop in the total balance of outstanding loans. The balance shrank by nearly $14 billion, decreasing from the previous month’s total to $583.0 billion.
When breaking down the data by property type, three sectors experienced significant movement in their special servicing rates.
According to Trepp, the lodging and mixed-use sectors led the decline. The lodging sector saw its servicing rate fall by 91 basis points to 9.10%, while the mixed-use sector experienced an even larger drop of 157 basis points, bringing its rate to 10.64%.
On the other hand, the office sector continued facing increasing stress, with its special servicing rate rising by 70 basis points to a new record high of 16.90%. Year-over-year, the office servicing rate has surged by nearly 500 basis points, underscoring the sector’s ongoing challenges.
