Individual Investor Support: 888.558.1031  |  Financial Professional Support: 877.826.BLUE (2583)

Total CRE Distress

January 16, 2024 / Chart of the Month

Print/PDF

The industrial and apartment real estate sectors, Bluerock’s highest conviction themes, have experienced little distress due to strong underlying demand fundamentals and limited new supply. The recent increase in commercial real estate loan distress has largely been confined to the office sector where 98% of the net new distress has emerged since 2021. Hotel and retail sector distress has remained notably high compared to the industrial and apartment sectors where loan distress remains less than 1% of the trailing 5-year transaction volumes. We believe the lack of distress in our favored sectors will support values more significantly, compared to other sectors as interest rates stabilize.

Source: Original chart courtesy of FS Investments, Anatomy of a CRE Correction, 2023



This information is educational in nature and does not constitute a financial promotion, investment advice or an inducement or incitement to participate in any product, offering or investment. Bluerock is not adopting, making a recommendation for or endorsing any investment strategy or particular security. All opinions are subject to change without notice, and you should always obtain current information and perform due diligence before participating in any investment. All investing is subject to risk, including the possible loss of principal. The information contained herein is sourced from third parties and Bluerock makes no assurances with respect to its accuracy, completeness or timeliness. Past Performance is not necessarily indicative of future results.