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**Trepp CMBS Special Servicing Rate Falls in December, Despite Mixed Sector Performance**
The Trepp CMBS Special Servicing Rate dropped by 15 basis points in December 2025 to 10.71%. This decline was largely driven by improvements in the office and lodging sectors, although performance varied widely across different property types. Despite the monthly decrease, the overall special servicing rate remains 82 basis points higher year-over-year compared to December 2024.
Lodging, office, and multifamily properties saw improved conditions in December. Special servicing rates for these sectors declined by 54, 52, and 7 basis points, respectively. Conversely, rates for mixed-use, retail, and industrial properties rose. Mixed-use properties experienced the sharpest increase, rising by 60 basis points, followed by retail at 42 basis points and industrial at 10 basis points.
In total, new loans transferred to special servicing during December amounted to approximately $1.9 billion across 49 loans. Retail led the month’s transfers, with $884 million spread across 18 loans — nearly 48% of the total. The highest retail transfer was a $310 million loan backed by Penn Square Mall in Oklahoma City.
The largest single loan to enter special servicing in December was the $355 million Orion Office Portfolio loan. Officially categorized as mixed-use, this loan was transferred due to imminent monetary default. It is scheduled to mature in February 2027 and has no history of delinquency.
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