Understanding Today’s CRE Distress Landscape

May 26

Current Distress Trends in Commercial Real Estate

•The overall delinquency is up 50 bps year-to-date and 200 bps from a year prior

•Overall delinquency is at 7.0% as of April 2025

Delinquency Rates Vary By Sector and Region

•Office delinquency rates are elevated at 10.3%, but below recent 2024 peak of 11.0%

•Lodging and Retail delinquency rates have risen to 7.9% and 7.1% respectively while industrial remains the lowest at 0.5%

•Apartment delinquency rate rises to 6.6%, but much of the distress is focused amongst Sun Belt markets

Investors Remain Optimistic Despite Rising Distress

•Transaction activity is up 30% year-over-year through 1Q 2025

•Strong fundamentals continue to drive investment, despite a time of higher interest rates

Interest Rates on the Rise