David Putro, Head of Analytics for Morningstar Credit, doesn’t sugarcoat it. In this candid conversation with the LightBox team, he offers an unflinching look at where distress is building in commercial real estate and why resolution is moving at a crawl. With a sharp focus on office, multifamily, and malls, David explains why this cycle is unfolding slower than the last, and why some properties may never exit special servicing. From billion-dollar loans stuck in limbo to zombie malls surviving on post-COVID extensions, he lays out the long road ahead for asset resolution. The picture of growing distress offers a stark counterpoint to the healthy surge in CMBS lending so far in 2025. So, what gives?

David breaks it all down and shares what Morningstar’s “Boots on the Ground” research reveals that spreadsheets miss (think vacancy patterns, tenant quality, and hidden red flags that influence recovery timelines). Don't miss David’s outlook on where distress is headed for the rest of 2025, why office assets remain frozen, and what really keeps credit pros like him up at night (spoiler: it’s not just interest rates).

00:55 Market Paradox: CRE Distress and CMBS Issuance

02:05 Challenges in Multifamily and Office Sectors

03:49 CMBS Purgatory and Loan Resolutions

10:59 Mall Distress and Adaptive Reuse

20:07 Boots on the Ground: Real Estate Insights

27:08 Future Outlook and Concern

Have questions for the pod team? Send them to [email protected].

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