The rate of U.S. CMBS loans entering special servicing is continuing to decline, according to Fitch Ratings in its latest U.S. CMBS newsletter.
After reaching a peak of $91.2 billion in second quarter-2010 (2Q’10), the rating agency said that specially serviced CMBS loans have declined for the last three quarters. Approximately $85.7 billion loans were being worked out by special servicers as of 1Q’11 in Q2 2010. This trend is expected to continue.
"Improving market conditions are slowing the velocity of loans transferring into special servicing," said Stephanie Petosa, managing director. "Servicers are also modifying loans and moving them back into master servicing with increased success."
Most of loans moved out of special servicing since 2009 -- 71% or $57.6 billion -- have been modified and returned to master servicing.