RCA Insights

Chart: Retail, Hotel Assets Dominate US Distress Inflows

By on September 29th, 2020

On Wednesday, September 30 at 1pm ET, listen to Real Capital Analytics Senior Vice President Jim Costello as he reviews the latest trends in the U.S. debt market. Click here for webinar details and registration.


The latest US Capital Trends report from Real Capital Analytics focused on U.S. lending activity in the first half of 2020 and distress flows in the market. In the current downturn, we have seen aggregate distress across all property types grow at a pace much faster than that seen during the Global Financial Crisis (GFC). Just two commercial property sectors, however, are behind the bulk of new distress.

RCA tracks all stages of distress, from the first signs of potential trouble through to resolution. We will classify a property as troubled when we have direct knowledge of property-level distress. Announcements of bankruptcy or default, tenant distress, or CMBS loans transferred to a special servicer are just a few examples of events that can trigger this troubled status.

The chart below shows the levels of new distress. Given news headlines, it’s to be expected that retail and hotel properties would represent a large share of newly troubled assets since the start of this Covid-19 recession. The magnitude of their shares may be more surprising. Retail and hotel assets combined represented 92% of new trouble in the second quarter of 2020. In the depths of the GFC, these two sectors were behind only about half the total distress.

bar chart tracking levels of distress across property types


Also on RCA Insights

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Low Interest Rates Not Enough to Kindle CRE Sales Activity

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Haley Crimmins

Manager, Analytics

Haley Crimmins is a Manager on the Analytics team, based in New York. She joined RCA in 2017 and enjoys providing timely and relevant analyses covering several facets of the commercial real estate industry.