More than $700 million worth of industrial properties fell intotrouble in February, upping the total outstanding distress to $6.8billion by the end of March, according to Real Capital Analytics'latest figures. Workout activity of just $58 million did little tooffset the second largest monthly increase this cycle in theinventory of distressed industrial properties.

But the sector is still faring considerably better than otherasset classes-with office, retail, apartments and hotels postingdistress figures between $25 billion and $33 billion. What's more,industrial accounts for only around 5% of outstanding CMBSbalances. The sector's strength is due largely to a lack of hotmoney in the market during real estate's mid-2000s heyday and awillingness to work through troubled loans. But it's also leftinvestors cooling their heels with few purchasing prospects.

Even February's jump in troubled assets is partially due to theaddition of two $100-million portfolios to the distressedinventory-a 12-property pool in the Midwest, which is owned by theMirvac Group and James Fielding Funds Management, and a secondsix-property, Kirkman Kennedy Edgewater-controlled bundle inOrlando and Memphis.