WASHINGTON, DC-Distressed commercial real estate bumped up in the last few months by $5 billion, according to newly-released figures from Delta Associates and Real Capital Analytics. The national level of distress now stands at $180.6 billion. Delta Associates’ CEO Greg Leisch, though, is not worried about the increase. "Ever since distress started to plateau in October 2010 when it peaked at $191.5 billion, it has been bumping around a range of $175 billion to $190 billion," he tells GlobeSt.com. If there is a $10-billion to $15-billion increase in the next quarterly report, then he’ll start to worry, he says.

For now, Leisch is maintaining his position that distress has stabilized, as long as three macroeconomic factors remain stable as well. The first factor is that interest rates remain low. “They don’t have to stay where they are now but they do need to stay low, rising no more than 100 basis points.” The second is that the Office of the Comptroller of the Currency continues its current management of the banking system, namely its support for the so-called pretend and extend policies of banks. Finally, he says, the economy needs to continue to improve, putting more people to work in offices and generating more retail sales.

All of that, taken together, means that when the trillion dollars worth of pending debt comes due over the next few years borrowers will be able to underwrite it. Of these three factors, interest rate is the most iffy, Leisch says. June will be a fateful month as the Federal Reserve Bank will cease its QE2 program and the debt ceiling will need to be raised. If it is not, Leisch says, “no one knows what that will do the financial markets.”