CMBS Trends December Service Rates Dip

December Special Servicing Rate Sees Modest Decline

The US CMBS special servicing rate declined to 10.71% in December 2025, according to Trepp. This marks a 15 basis point drop from November, led by rate decreases in the office and lodging segments. Year-over-year, the rate ticked up from 9.93% in December 2024.

Performance diverged by property type. Office special servicing rate fell 52 bps to 16.64%, lodging was down 54 bps to 9.48%, and multifamily dipped 7 bps to 8.08%. In contrast, mixed-use increased 60 bps to 13.97%, retail rose 42 bps to 11.99%, and industrial edged up 10 bps to 0.84%.

Monthly Transfer Activity Led by Retail

New loans transferred to special servicing in December totaled roughly $1.9B across 49 loans. Retail properties accounted for the largest share, with $884M in transfers (48% of new volume). Mixed-use followed at $429M, while office transfers totaled $277M.

The $355M Orion Office Portfolio—the month’s largest new transfer—is classified as mixed-use. It covers 2.1M SF across 19 properties and has not previously been delinquent. The loan’s special servicer is reviewing a proposed modification for its February 2027 maturity.

Spotlight on Notable Transfers

December’s second-largest transfer involved a $310M loan backed by the Penn Square Mall in Oklahoma City. The loan, set to mature in January, moved to special servicing for imminent maturity default after the borrower was unable to secure refinancing. The property is a 1.06M SF super regional mall with 89% occupancy for most of 2025.

CMBS 1.0 vs. 2.0+ Performance

December’s special servicing rate for older CMBS 1.0 deals was significantly higher at 63.46% versus 10.62% for CMBS 2.0+ deals, underscoring the lasting stress in legacy transactions. Retail loans in CMBS 1.0 reached an elevated 92.02% special servicing rate, while lodging came in at 82.99%.

Among CMBS 2.0+ deals, lodging and office continued to post above-average servicing rates. While newer vintages have generally fared better, previous months saw upward pressure on these rates, particularly during periods of broader market distress, with industrial loans remaining the most resilient at 0.84%.

Looking Ahead

The CMBS special servicing landscape in December 2025 underlines persistent challenges, especially for legacy and retail-backed deals. Office and lodging rates improved this month but remain elevated compared to pre-pandemic levels. Industry analysts and investors will continue to monitor property-type divergence and refinancing hurdles into 2026.