That’s the conclusion of a Bloomberg Business article citing statistics from the Fed; Trepp, MSCI Real Assets, Fitch, and other companies that track real estate debt. The reason is high interest rates and too much supply, at least at the luxury end.

According to MSCI, there is now about $34 billion of distressed outstanding office debt, four times that of apartments. However, the potential distressed debt is $67 billion for apartments and $51 billion for office. For all types of commercial real estate, the potential distress debt adds up to about $220 billion, or about 22% of the one trillion that will mature by 2028. Those are big numbers, but that percentage looks low, for the distress office problems are probably greater than most people will admit to.