CRE Distress Edges Higher, But Investment Activity Holds
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
*Through April
For loans 30+ days delinquent
Sources: Marcus & Millichap Research Services, Trepp
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