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NEW YORK CITY—More than $700 million worth of industrialproperties fell into trouble in February, increasing the totaloutstanding distress to $6.8 billion by the end of March, accordingto the latest Real Capital Analytics figures. Workout activity ofjust $58 million did little to offset the second largest monthlyincrease this cycle in distress inventory for industrialproperty.

But the sector is still faring considerably better than otherasset classes—with office, retail, apartment 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 on the curb with few purchasingprospects.