CRE Credit Distress: More Cycle Than Crisis

2025-10-28 06:31:00 ET

By Rich Hill, Global Head of Real Estate Research & Strategy

While concerns around commercial real estate ((CRE)) credit are growing, the data suggests a market that is adjusting, not breaking down. Loan modifications have increased, but remain modest relative to total exposure, and the share of maturing CMBS loans being paid off remains close to long-term historical averages. Distress is still expected to rise, but as a lagging indicator, it reflects a cycle already well underway. With REITs recovering and private valuations stabilizing, the CRE market appears to be progressing through a typical reset rather than entering a new phase of systemic risk....

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