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CRE Distress Tracker Hits Decade-High of $107B

Office has the biggest outstanding total distress but multifamily’s is potentially far larger.

By Erik Sherman | February 03, 2025 at 06:21 AM

MSCI has released its U.S. distress tracker for the fourth quarter of 2024, which hit $107.0 billion. That represents a 24.3% or $20.9 billion year-over-year increase — and the largest rise seen in a decade, but still only a little more than half of the peak during the Global Financial Crisis. Additionally, this is the starting point for 2025.

The good news is that the rate of growth in distress has been slowing since the last quarter of 2023. Put differently, in calculus that would mean the second derivative, or how quickly change happens, is negative. Markets might want an immediate switch to falling distress, but turning down the rate of growth is a mathematically necessary step and important to recognize.

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