The volume of underperforming CMBS loans in the hands of special servicers fell to the lowest level since 2009, Fitch Ratings reported.

At the end of 2012, the volume of specially serviced CMBSloans decreased to $70.6 billion after peaking at $91.7 billion in 2010, according to the rating agency.


Fitch attributed the decrease to a significant drop in the number of loans transferred to special servicing in 2012 and the high number of loan resolutions.

“Perhaps the most encouraging sign is how closely the volume of CMBS loans going in to special servicing and the ones coming out are aligned now,” said managing director Stephanie Petosa. “Last year saw $49.9 billion in loans transferred into special servicing and $47.1 billion coming out. This is a notable contrast from 2009, when $74.9 billion transferred in with only $8.8 billion transferring out.”

In 2011, $82.5 billion in loans transferred in, while $45.3 billion transferred out.

While the volume of specially serviced CMBS loans decreased, the average time spent in the hands of special servicers went up. In the fourth quarter of 2012, the time spent in special servicing averaged 21 months, up from an average of 15.2 for 2010-2012.

“This is partially due to resolved loans employing more complicated and, therefore, more time consuming, resolution strategies,” Fitch explained.