**CMBS Special Servicing Rate Declines in July, Though Remains Elevated**
The CMBS Special Servicing Rate fell by nine basis points to 10.48% in July, according to data from Trepp. This marks the first decline after three consecutive months of increases, though the rate continues to sit above historical averages.
Despite the modest decrease in the servicing rate, the overall balance of loans in special servicing showed little change from June. However, the total balance of CMBS loans outstanding increased by approximately $5 billion, reaching $597.0 billion in July.
A closer look at individual property types reveals a general downward trend in servicing rates across most sectors. Four of the five major property types reported declines, with the retail sector experiencing the largest drop—29 basis points. Most notably, the office sector declined by 17 basis points to 16.21%, following a record-high the previous month.
Multifamily was the only sector to buck the downward trend, rising 19 basis points to 8.37%.
While the July report offers some positive signs of stabilization, the overarching data indicates that CMBS special servicing activity remains elevated when compared to historical norms.
