Overall, CMBS special servicing rates have been on an upward trend, according to a new Trepp report for September 2023. The overall rate last month of 6.87% for all property types and both CMBS 1 and 2 was up 20 basis points from August. Looking back three months and the jump was 45 basis points, 132 points up from six months back, and 193 basis points from a year ago.

Looking at the difference between CMBS 1.0 and then CMBS 2.0, with its generally assumed more conservative structures, was notable. The former has seen somewhat falling special servicing rates over the last year, but still in September was 32.72%. CMBS 2 went the opposite direction, rising 201 basis points from 4.66% a year ago to 6.67% in September. The reason the overall rate in September was only 6.87% then is because the CMBS 1 component had to be much smaller.

Back to the overall numbers, the highest special servicing rate was 10.14% for retail, a high number but one that has come down over the last year from 10.97%. What Trepp pointed to as the was office sector. Overall, it jumped 62 basis points from 7.72% to 8.34%. "This is now the first time that the office special servicing rate has surpassed the 8.00% mark since May 2017," they wrote. "Additionally, the mixed-use rate rose by 26 basis points, and the multifamily rate dropped by 44 basis points. Industrial went from 0.33% to 0.32%, showing that the category seems sound and in demand.