CMBS Particular Servicing Fee Continued to Climb in August

Road to Recovery? Confidentiality Agreements for Industrial, Multifamily Properties Bounces Back

According to a report from Trepp, the special service rate for commercial mortgage-backed securities was 10.04% in August, up 55 basis points from July.

The increase was mainly driven by the retail and accommodation industries and continued a steady increase in the rate that started in March. The special maintenance rate for the retail trade was 17.3% after 16.0% in the previous month. The special maintenance rate for accommodations was 25% after 24.3% in July. The housing rate was the second highest increase of any property type.

At the beginning of this month, Trepp reported that the CMBS crime rate continued to fall, dropping to 9.02% in August.

"The difference in the development of the crime rate and special service rate is due to the fact that forbearance changes the credit status from crime to current, but the loans, if they are emphasized, continue to be specially serviced," the report said. "Given that the Forbearance Agreement usually provides a short term deadline, the Special Maintenance Rates (s) seem a better representation of the current emergency in the CMBS universe."

The special maintenance rates in the industrial (1.21%), apartment building (2.56%) and office (2.93%) sectors remained generally unchanged, according to the report.

The special maintenance rate for CMBS 2.0+ bonds rose to 9.12% in August, an increase of 58 basis points, according to the Trepp report. The outstanding balance of these loans increased approximately $ 3.2 billion to $ 48.1 billion.

For old properties (CMBS 1.0), the special maintenance rate rose by six basis points to 46.81%. The outstanding balance on these loans fell from $ 6.2 billion in July to $ 6.1 billion in August.

"The number of new loans transferred to special services slowed in August. A total of 170 loans were granted to special services, compared with 363 in the previous month," the report said.


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