The median office building is fine. One in fourteen cannot pay its mortgage.
Debt service coverage across 13,652 commercial buildings — and why the average hides exactly what you are looking for.
Cite as: FACTANKER, https://factanker.com/record/office-median-fine-one-in-fourteen
Ask whether commercial real estate is in trouble and you get a mood. Ask the loan servicers and you get a distribution — which turns out to be the whole story. FACTANKER reads the debt service coverage ratio that trustees report for every property backing a commercial mortgage security: net operating income divided by the debt payment due. Below 1.0 the building does not earn what it owes. We looked at 13,652 buildings with a figure reported since January 2024.
744 of them — 5.4 % — are below 1.0. That number is unremarkable. Where it sits is not.
Coverage by property type
| Type | Buildings | Below 1.0 | Share | Median coverage |
|---|---|---|---|---|
| Hotels | 1,450 | 137 | 9.4 % | 1.92 |
| Mixed use | 868 | 69 | 7.9 % | 1.77 |
| Office | 2,108 | 150 | 7.1 % | 2.03 |
| Mobile home parks | 537 | 31 | 5.8 % | 1.79 |
| Multifamily | 2,108 | 111 | 5.3 % | 1.63 |
| Industrial | 1,043 | 44 | 4.2 % | 2.11 |
| Retail | 3,227 | 131 | 4.1 % | 1.95 |
| Self storage | 1,613 | 49 | 3.0 % | 2.04 |
| Cooperative housing | 329 | 9 | 2.7 % | 4.88 |
A hotel is three times more likely to miss its debt service than a storage facility. That is a real gap, and it is invisible in the medians: hotels sit at 1.92, storage at 2.04 — barely apart. The typical building in both categories earns roughly twice what it owes.
The average is the wrong instrument
Office is the clearest case. Its median coverage is 2.03, the second-highest of any type: the typical office building in these pools earns twice its debt payment. Read only that number and the sector looks healthy. Yet 150 office buildings — one in fourteen — earn less than they owe, and some earn almost nothing against it. At 4683 Chabot Drive in Pleasanton, California, the reported coverage is 0.01. At 40 East Verdugo Avenue in Burbank it is 0.02. These are not near misses.
Distress in commercial property is not a shift of the whole distribution. It is a tail that detaches while the middle holds. Any measure that reports the middle will report that nothing is happening.
What these numbers are, and what they are not
This covers property in commercial mortgage-backed securities — loans that were bundled and sold to investors. Bank-held commercial mortgages are not in here, and they are the larger share of the market. A building appears only if a trustee reported a coverage figure since January 2024.
Two corrections mattered enough to halve the headline. First, 3,980 properties report a coverage of exactly zero. That is a placeholder for "not reported", not a measurement; counting it as failure would have produced 21.8 % instead of 5.4 %. Second, a single large loan is routinely split across several trusts — pari passu — so the same building can appear dozens of times. One New York address occurs 33 times across 15 trusts. The 65,914 loan records in our data correspond to 24,636 distinct buildings; every figure above counts buildings, not loan records.
Each building's page carries its own income history, quarter by quarter, with a link to the filing each figure comes from — and, where the originator could be identified, to that bank's own quarterly accounts.