Special Servicers Ride CMBS Maturity Wave

S&P headquarters in Lower Manhattan

NEW YORK CITY—With servicers skillfully negotiating the year’s wave of CMBS maturities, the expectation of an increase in special servicing inventory hasn’t come to pass, according to S&P Global Ratings.” At the end of 2016, we had anticipated CMBS active special servicing inventory would experience growth throughout 2017 because of the large volume of maturing loans that could not be refinanced,” S&P said. In fact, the ratings agency said Monday that with volume down 10.4% year-over-year to $26.7 billion as of June 30, special servicers’ volumes are now at the lowest levels since 2008.

“Lending markets have been more receptive in providing long-term takeout financing, particularly because alternative capital sources, including mortgage REITs, bridge lenders, and opportunity funds, have emerged,” says Steven Altman, servicer analyst with S&P. “Additionally, 2017 CMBS issuance levels have been greater than S&P Global Ratings and other market participants initially anticipated.”