**Special Servicing Rate Declines in December, Led by Lodging and Office Sectors**
The Trepp CMBS Special Servicing Rate dropped by 15 basis points in December 2025, landing at 10.71%. This marks a decline primarily driven by improvements in the office and lodging sectors. However, despite the monthly decrease, the overall rate remains 82 basis points higher than it was in December 2024.
Breakdowns by property type show varying performance. The special servicing rates for lodging, office, and multifamily asset classes saw decreases of 54, 52, and 7 basis points, respectively. In contrast, mixed-use, retail, and industrial sectors experienced increases — by 60, 42, and 10 basis points, respectively.
In December, approximately $1.9 billion in loans were newly transferred to special servicing across 49 loans. Retail properties led the transfers, accounting for about $884 million across 18 loans, representing nearly 48% of the month’s total. Among them, the largest individual transfer was a $310 million loan backed by Penn Square Mall in Oklahoma City.
The single largest loan to enter special servicing during the month was the $355 million Orion Office Portfolio loan. Officially classified as mixed-use, the loan was transferred due to imminent monetary default. It is scheduled to mature in February 2027 and, notably, has never previously been delinquent.
