United States CRE Losses Slam Big Lenders
Why CRE Stress Is Rising Now Accelerating strain across commercial real estate is being driven by a sharp convergence of higher interest rates, weaker property valuations, tighter credit, and softer demand in key segments. Across property types, distress reached 40.4% in February 2025, reflecting broad deterioration. These figures are based on RMA benchmarking of roughly $1 trillion in commercial exposures. Office remained the weakest segment at 59.4% distressed, while multifamily climbed to 46.1%. In Dallas, office vacancy climbed to 17.9%, above its 10-year average, underscoring how office vacancy is compounding lender risk. Industrial also stayed under pressure, though retail and residential construction performed better. Multifamily Pressures Deepen Multifamily weakness has been intensified by rental oversupply, especially in high-end apartments. Elevated vacancies, slower absorption, and inflation-hit renters reduced pricing power in heavily built markets. At the same time, an i...