Four asset classes posted $4.6B in new distress in August as the rate of distressed commercial real estate loans rose for three straight months, according to a report from Cred iQ.

The largest distressed loan in the report is for CyrusOne’s 45-megawatt data center in Carrollton, Texas, northwest of Dallas. The $687.1M loan — flagged as newly delinquent, performing matured — matured on Aug. 9. The borrower is still making payments while working out a resolution, the report states. 

CyrusOne, the KKR & Co.-affiliated data center owner, operator and developer, did not immediately respond to a request for comment.

The data center loan is representative of distress emerging outside of the multifamily and office sectors, with industrial, hospitality, retail and self-storage loans making up the $4.6B. Industrial distress overall reached $1.4B this month.

The distress rate was 10.78% in July, up from 10.11% in April. Early August numbers indicate that distress will increase for a fourth consecutive month, the report states.

The same is true for special servicing, which rose from 9.73% to 10.02% from April to July, and delinquency, which rose from 8.08% to 8.67% during the same period.

“A limited refinancing environment combined with elevated interest rates continues to push loans past maturity across property types, not only the office and multifamily loans that typically dominate distress coverage,” Cred iQ said in its report.

Overall hospitality distress reached $1.17B this month, per Cred iQ. The new distress largely came from the $325M loan for the Hyatt Regency New Orleans, which transferred to special servicing on a payment default, as well as the $362.5M loan for The Ritz-Carlton Sarasota, which is newly delinquent after missing its September maturity while continuing to pay. 

Braemar Hotels & Resorts Inc. announced in June that it planned to sell The Ritz-Carlton Sarasota and two hotels in Yountville, California, to affiliates of KSL Capital Partners in a $437.5M cash deal. 

Retail distress overall reached $951.4M this month, with Fresno Fashion Fair Mall in California and Harlem USA in Manhattan transferring to special servicing on imminent maturity default. Distress also emerged for loans on malls in Iowa, Pennsylvania and Mississippi. 

There is $124M in self-storage distress, traced almost entirely back to a 91-property Prime Storage portfolio and a 39-property U-Haul portfolio, the Cred iQ report states. 

The Carrollton data center secured its $687.1M CMBS loan in July 2024, when CyrusOne said the loan was the first colocation/enterprise data center single-asset, single-borrower securitized financing since the 2008 financial crisis. The property was appraised for about $1.2B at the time, according to Morningstar Credit data. 

The 645K SF facility, built in 2000 and renovated in 2010, serves more than 100 customers and houses the infrastructure and 911 dispatch center for four cities. The borrower requested a loan extension to August 2027, which is under review, according to servicer comments provided by Morningstar.