The Trepp CMBS Special Servicing Rate dropped by six basis points in December 2023, falling to 6.78%. However, the long-term trend is still up: Trepp said the special servicing rate closed out 2023 with a total increase of 167 bps year over year.

Most property types actually saw reductions in their special servicing rate last month, aside from the mixed-use category, Trepp reported. After falling 104 bps in November to 6.66%, the mixed-use rate reversed in December, increasing 108 bps to 7.74%.

Most notable was office, which saw its first decline in more than a year, falling 42 bps from 8.87% to 8.45% in December. The retail rate also saw a substantial decline, falling 46 basis points to 9.37% in December.

Similarly, Kroll Bond Rating Agency (KBRA) reported earlier this month that the delinquency rate for KBRA-rated U.S. CMBS pulled back to 4.21%, fully offsetting November’s 19-bp increase. The total delinquent and specially serviced loan rate (the KBRA distress rate) also declined from November to 6.65%, a drop of 25 bps.

KBRA said the improved distress rate was broad-based, with five of seven sectors experiencing declines. The exceptions were multifamily and industrial, which increased for a second straight month.

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