There's an interesting question about the current level of distress in commercial real estate. How much is there? Some amount seems to be secret, as in not easily identified, instead being handled privately without an obvious full run-on distressed properties. And then there are properties on the brink but not yet in the distressed category.

MSCI's US distress tracker report tries to make this clearer by discussing actual and potential distress. Distress "indicates direct knowledge of property-level distress," they wrote. "Known through announcements of bankruptcy, default and court administration as well as significant publicly reported issues — such as significant tenant distress or liquidation — that would exemplify property-level distress. This also includes CMBS loans transferred to a special servicer."

Actual distress, according to the firm, totaled nearly $85.8 billion through the fourth quarter of 2023. Roughly $35.5 billion was office, $21.6 billion in retail, $14.7 billion in hotels, $9.6 billion in apartment, $1.6 in industrial, and $2.8 billion in other. But that is explicitly property-level distress.