A new MSCI report on CRE trends to watch in 2025 finds that despite interest resuming, “the recovery is still nascent and not everywhere all at once.”

One factor is the still high percentage of the $500 billion in CRE loans due to mature this year that can be classified as in trouble. “If these loans were to mature at Q3 2024 price levels, approximately 14% would be flagged as underwater, meaning their current asset values have fallen below the outstanding loan balance,” the report stated.

In some cases, the assets have serious underlying issues, noted Alexis Maltin, executive director of MSCI’s America’s real estate assets research, in an interview with GlobeSt.com. One of these is the year they were built. “In the industrial sector, many assets built before 2010 have obsolescence and other fundamental problems,” she said.