May 20, 2019
New research by Trepp shows that the percentage of CMBS debt that moved into special servicing increased in April, marking the first rise July 2018. The Trepp CMBS Special Servicing Rate climbed 11 basis points to 3.53% in April. The reading is also the highest it has been in the last two years.
A key culprit for the overall bump was the retail sector’s 24-basis-point rate jump to 5.73% in April, according to Trepp. The special servicing readings for the other four major property sectors also increased.
The lodging segment was still the best performing major property type, incurring the month’s second-greatest jump, rising nine basis points to 2.25%.
A total of 26 loans totaling $910.2 million were newly-transferred to special servicing in April. Retail loans made up 68% of that balance, which far exceeds the percentage represented by the other four major property types.
Trepp reports the largest notes that were transferred to special servicing in April were the $300 million Destiny USA Phase I loan, and the $130 million Destiny USA Phase II loan. Both pieces are collateralized by the Destiny USA super-regional mall in Syracuse, New York.
While Trepp’s Special Servicing rate rose by 11 basis points in April, it is still 115 basis points less than its year-ago level.
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