A $43M loan secured by City Place Midtown Apartments in Midtown Houston has been transferred to special servicer Rialto Capital Advisors.

McGowen Brazos Venture Ltd., the borrower, transferred the loan on Sept. 28 even though the loan has been current on payments. The last payment was made on Oct. 6, according to global securities data provider Trepp.

Special servicer notes showed the loan was transferred for imminent monetary default at the borrower’s request, as a result of the coronavirus pandemic. The loan seller is CCRE.

The 281-unit high-rise apartment building was built in 2010, and occupancy averaged 98% in 2019. However, between July 2019 and June 2020, occupancy at the property fell to 91%. The property was valued at $70.7M in 2014.

The borrower declined to comment through a property representative.

The rate of CMBS special servicing cases involving multifamily properties has been relatively low during the pandemic compared with other asset types, like hotels and retail.

“While the overall CMBS special servicing rate has shot up in recent months, the special servicing for multifamily has remained relatively low,” Trepp analyst Jyoti Yadav told Bisnow.

“As of September data, the overall CMBS special servicing rate was 10.48% while the multifamily special servicing rate was 2.66%.”

Once a distressed loan is transferred to a special servicer, the firm looks for ways to manage the debt in a manner that will benefit all of the holders of interests in the CMBS pool. Depending on the circumstances, that can involve modifications of the original CMBS loan or a sale of the property.

McGowen Brazos Venture’s loan makes up 5.79% of the collateral behind CMBS issuance COMM 2014-CR18. That deal is part of CMBX 8, according to Trepp.