Distressed Commercial Real Estate Now At $186.9B

You read the headline right… $186.9 BILLION- with a “B.” That figure includes properties in default, foreclosure and lender REO. This is according to data gathered from the research firm, Real Capital Analytics. This figure represents an increase of 12%, or just over $20B, since June. Experts predict that this sky-high range will be around for a while, as lenders continue to extend debt obligations and commercial properties stabilize in many markets. This latest figure has many wondering if the bottom of the commercial market has been hit, but the true test will be seen later this year and into next, as $600 billion in loans come due and an expected 100 banks predicted to fail in the next two quarters. The largest distressed sector continues to be offices, with $47B, followed by hotels at $36.6B and apartments at $35.3B. The Manhattan market still holds on to first place in the distressed commercial real estate market, followed by Los Angeles-Orange County.

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