It appears that the extend and pretend strategy employed by most lenders has allowed property owners the luxury of time to either refi or sell assets that have been transferred to special servicing, says Quadrant Realty Finance?s Jason Piering, analyzing the above Trepp data. As real estate fundamentals continue to improve, several options have emerged permitting an exit from the two-year-long holding pattern, he says. Banks accelerating the credit thaw from their almost three-year lending hibernation, life companies reallocating funds back to real estate investments as corporate bond yields retreat, and the emerging revival of the CMBS market have been leading factors. 

However, the most significant factor is the recent fundraising from private opportunistic debt and equity investment funds— specifically targeting loans held on the books of weary lenders and their servicers, he tells us. (Here's Jason with wife, Carol. This photo makes us want to go to the Riviera Maya ourselves.) As this type of new money increases along with the improved availability of traditional money, the declining trend of loans in special servicing will continue at a steady pace, Jason says.