The commercial real estate (CRE) sector is facing significant challenges as higher-for-longer interest rates imposed by the Federal Reserve begin to impact the market. CRE loan distress has reached a third consecutive record high as of June 12, signaling increasing financial strain within the industry. In response to market conditions, Blackstone has shelved a $1.3 billion commercial mortgage-backed securities (CMBS) deal amid a surge in private-label CMBS sales, which are up more than 180% year over year. Despite the distress, some industry experts believe that the current market conditions, including tightening spreads and increasing availability of debt, indicate that the bad news may already be priced into assets. On June 13, Blackstone confirmed the pause of its $1.3 billion CMBS deal.