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CyrusOne data center loan adds to $4.6B rise in distressed CRE
Cred iQ said elevated interest rates and a limited refinancing environment pushed loans past maturity across multiple property types, with distress set to rise again into August.
Four commercial real estate loan categories reported $4.6 billion in new distress in August, extending a pattern of rising delinquency over the past three months, according to a Cred iQ report cited by Bisnow.
The report’s largest distressed item is a $687.1 million loan tied to CyrusOne’s 45-megawatt data center in Carrollton, Texas. The loan was flagged newly delinquent and performing at the time it matured on Aug. 9, and the borrower was still making payments while working through a resolution, Bisnow reported.
Bisnow said the distress trend is spreading beyond the office and multifamily sectors into industrial, hospitality, retail, and self-storage loans. Industrial distress rose to $1.4 billion, and the overall distress rate increased to 10.78% in July from 10.11% in April, while special servicing rose to 10.02% from 9.73% over the same period.
Cred iQ attributed the broader pressure to “a limited refinancing environment” combined with elevated interest rates. Hospitality distress reached $1.17 billion, including transfers tied to the Hyatt Regency New Orleans and The Ritz-Carlton Sarasota, and Bisnow reported retail distress at $951.4 million, with self-storage distress of $124 million concentrated in Prime Storage and U-Haul portfolios.