The volume of distressed commercial real estate continues to remain at a plateau, based on newly-released figures from Delta Associates and Real Capital Analytics. The two reported that distressed commercial real estate in the United States totaled $181.1 billion in June 2011, an increase of $0.5 billion since the last time Delta and RCA reported the figures in April.
Distressed volume began to show signs of leveling off in March of 2010. Since then it has cycled between lows of $175 billion and highs of $190 billion, with a peak of $191.5 billion in October 2010. Whether it will remain within this band over the next twelve months, however, is still an open question, Greg Leisch,CEO of Delta Associates said in earlier interviews with GlobeSt.com. Delta was unable to return a call from GlobeSt.com in time for publication. Leisch has been warning that there is still $300 billion in loans coming due, but if the industry is able to dodge a significant uptick in defaults in the near to medium term, meaningful decline in distress will happen 2012, assuming interest rates remain low.
The office sector still leads in categories with the most distress, with $43.4 billion, according to the report. Apartments are in second place, with $36.0 billion of distress, which is a 6.3% drop since April. Hotel remains in third place, with a 9.8% increase since April to $34.9 billion.