In this article, you'll learn:

• The current state of commercial real estate debt, reaching $94.2 billion in distress in Q2 of 2024.
• The effects of rising interest rates and lower office demand on property values.
• Landlords selling properties at deep discounts due to reduced occupancy and revenue.
• Increasing foreclosure risks and defaults among commercial landlords due to economic pressures.

In recent years, the hole of commercial real estate debt has gotten deeper and deeper. And no matter how many steps are taken forward, we just keep getting knocked further back.
Because while $8.6 billion of commercial real estate debt was resolved in the second quarter of 2024, the period saw $10.6 billion of new distress.
In total, in the second quarter of 2024, U.S. commercial property distress reached $94.2 billion, a $2.0 billion increase from the previous quarter, according to MSCI's Capital Trends US Distress Tracker. The property market with the average highest debt is the office sector.