Inside Special Servicing: The Assets, Markets and Key Trends Defining 2026

SitusAMC was recently ranked the #1 U.S. CMBS, SASB and CLO special servicer by issuance volume in 2025. The firm was appointed special servicer on approximately $30.2 billion in newly issued U.S. CMBS and supported $7.4 billion in CLO coverage. SitusAMC is also named special servicer on more than $111 billion in unpaid principal balance as of Jan. 1, 2026, and has achieved a 93% recovery rate over the past five years.  

What's ahead for special servicing in 2026, and where are the risks and opportunities? In this interview, Curt Spaugh, Head of Special Servicing, discusses the themes driving activity and what the next phase of the cycle is likely to bring with Andy Garrett, Head of Marketing and Communications. Watch the video above. 

A Market Still Working Through the Cycle 

Spaugh described today’s market as one “still in motion,” with unresolved issues lingering beneath improving headlines. Using a familiar analogy, he framed the post-COVID cycle as only partially complete. “We’re in the second game of a doubleheader and we’re about that third or fourth inning,” he said. “The pitching staff’s a little worn, but ours has a lot of energy. I think we can finish off the doubleheader pretty well.” 

Despite pockets of stabilization, Spaugh emphasized that maturity defaults remain the dominant driver of special servicing workload, particularly across office markets where refinancing feasibility depends on leasing fundamentals, tenant demand and sharply rising costs. 

Maturity Defaults and the “Haves and Have-Nots”  

The most important distinction in office is not simply geography or property type—it’s asset quality and submarket-level performance, Spaugh explained. 

“It’s office buildings, it’s the haves and have nots with the office building,” he said. “Some of them are very well positioned. New York, if you’re a AA class building, you’re knocking it out of the ballpark. But there’s other places where we’re not having that sort of rebound.” 

He noted that this divergence is unlikely to resolve quickly. With rent rolls still shifting and tenant improvement and leasing commission (TILC) costs “through the roof,” refinancing analysis has become more complex—and more uncertain. 

“All these maturity defaults are going to keep us busy I think for another at least three or four years,” he predicted.  

Spaugh also cautioned against overly broad market narratives, pointing out that performance differences within the same metro can be stark. “In Los Angeles, for instance, downtown is struggling big time, Century City is doing great,” he said. “Dallas, Uptown doing great, Downtown Dallas, not so good.” 

Other Property Types: Select Pressure Points 

While office properties continue to dominate distress discussions, Spaugh offered a more measured view of other sectors. Hospitality has rebounded since COVID-19, but certain segments remain tied to office market weakness. 

“I think hospitality and that CBD space will continue to have issues,” he said, adding that leisure-driven hospitality has performed well, though it could soften in an economic downturn. 

As for multifamily, Spaugh pointed to oversupply pressure in parts of the Sun Belt and slower rent growth nationally, even as expenses rise. Still, he did not foresee a broadly negative trend. “I see speed bumps there, but I don’t see a real downturn,” he said. “The economy is stronger than that point of time. Employment relatively strong.” 

SASB: “Three-Dimensional Chess” at the Largest Scale 

As single-asset single-borrower (SASB) deals continue to grow in size and complexity, Spaugh emphasized that the workout process has evolved into something far more intricate than in prior cycles. “They’re difficult, they’re tricky,” he said. “A lot of moving pieces. I sometimes tell people it feels like three-dimensional chess.” 

SASB workouts require not only borrower negotiation, but also coordination across multiple stakeholders, tranches and structures. Spaugh credited SitusAMC’s ability to navigate that complexity to the depth of its team and the collaborative approach used on large assets. “We work on these as an experienced team and that’s what has generated the most results for us,” he said, adding that most of the asset managers have been in the business for 30 years. 

CLOs: Business Plans and Collaboration 

Spaugh also addressed the growth of CRE CLOs, noting that many of these loans are built around repositioning strategies and business plans that require close alignment between special servicers and collateral managers. “We work closely with the collateral manager… to determine the best outcomes and resolution strategies,” he said. 

He suggested CLO workouts can benefit from the fact that collateral managers often have deeper asset-level knowledge than parties in traditional CMBS structures. SitusAMC’s ability to collaborate and execute, he said, has been a differentiator. “We’ve gotten huge results and I expect we’ll continue to do so,” he said. 

Looking Ahead: Liquidation Decisions and “First Loss is Best Loss” 

When asked what trends are expected to define 2026, Spaugh returned to the theme that continues to drive activity across the industry: the maturity wall. But he also suggested that special servicers may increasingly be forced to make hard calls earlier. 

“I do think it’s the maturity defaults really is the theme,” he said. “We’re just going to keep... working on these maturity defaults, figuring out the best resolutions.” 

In certain cases, that may mean moving toward liquidation sooner than lenders might have been willing to in prior years. “An old special servicing term is that 'your first loss is your best loss,'” Spaugh said. “Now I see in ’26 that we’re going to probably be going down the liquidation path a little bit more… take some haircuts now to avoid bigger losses down the road.” 

Final Takeaway: Precision Matters More Than Ever   

Across property types, markets and loan structures, Spaugh’s message was consistent: Outcomes will depend on granular asset-level detail, realistic capital assumptions and disciplined execution—particularly as refinancing risk continues to pressure sponsors and lenders alike. As the market works through the next innings of this cycle, special servicing will remain central to value preservation—and to navigating the difficult decisions that lie ahead. Watch the video above. 

SitusAMC’s Special Servicing solutions provides clients with a white-glove approach, offering a need-driven, collaborative and responsible engagement model. SitusAMC dedicates a highly responsive single point of contact, helping streamline client engagement and reduce operational risk. Learn more on our website or contact Curt Spaugh, Head of Special Servicing.