Where Is the Distress in Commercial Real Estate? Look to the Banks

hands pointing at a tab showing graphs

September 3. 2025 – In today’s commercial real estate market, the question isn’t whether distress exists, it’s where it’s hiding. The headlines have focused on office vacancies, retail bankruptcies (one of the most recent being mall staple Claire’s), and high interest rates. But the most significant concentration of distress is building quietly on the balance sheets of banks.