The CMBS special servicing rate is continuing to creep higher. In July, it was up month-over-month, by seven basis points to reach 8.30%, according to Trepp.

This year, special servicing started at 6.95% and has grown every month, meaning an additional 135 basis points since January 1, 2024, and 168 year-over-year. The rate is at a three-year high and is currently 350 basis points above the July 2022 level. The seven-basis movement is small – but the cumulative shift is significant.

Special servicing rates vary by property type. Currently, office is at the top with the July 2024 special servicing rate of 11.25%, up from 7.33% a year ago. The next highest was retail at 10.89%, only two basis points above the 10.87% rate the prior year. Then mixed-use went from 6.89% in July 2023 to 8.93% in July 2024. Lodging was 7.06% in 2023 and 7.33% in 2024. Multifamily saw a more appreciable absolute gain to 5.11% from 3.26%. The smallest level of special servicing was industrial's increase from 0.31% to 0.40%. The change between June and July 2024 was industrial (-3 basis points); lodging (+5 basis points); multifamily (-6 basis points); office (+46 basis points); mixed-use (-41 basis points); and retail (+7 basis points).