The amount of commercial real estate backed by troubled loans in the United States continues to fall from a high of $191.5 billion set in March 2010.

So-called distressed real estate, which included properties in default or foreclosure and real estate taken over by lenders, totaled $166.9 billion in January 2012, down $4.7 billion since October 2011, according to data from Real Capital Analytics.

The steady decline might be because lenders are extending debt obligations, and commercial property values are stabilizing. And with property values rising in select areas, some deals are no longer worth less than their loans.

We think the property loan picture will continue to improve in a meaningful way throughout 2012 and beyond if interest rates remain low and the economic expansion picks up pace. The real test of the decline in the level of distressed assets will come in 2012 and 2013, with about $300 billion in loans coming due each year.

Nationally, the office sector represents the largest share of distressed commercial real estate at $41 billion. This is a decrease of $829 million, or 2 percent, since October 2011. Apartment properties continue to have the second-highest level of distress, with $35.2 billion of distress — a $0.3 billion, or 0.9 percent, drop since October. Unbuilt land and other properties constitute the third-highest level of distress with $29.5 billion in distressed assets, a decline of $300 million. Retail has the fourth-most distressed assets at $27.9 billion, down from $28.6 billion in October. Hotels have the fifth-highest level of distressed assets currently, falling $3.1 billion since October, to $21.1 billion. Although industrial has by far the lowest volume of distressed real estate, it rose $435 million to $12 billion, an increase of 3.8 percent.

‘Stressed’ real estate

While the volume of distressed commercial real estate properties is significant, so is the looming volume of stressed property. These properties have characteristics of concern in the short term — maturing loans, bankrupt tenants, under-performance, financially troubled owners or other significant obstacles that could potentially lead to distress in the future.

The Los Angeles-Orange County area has the highest total volume of distress, followed closely by Manhattan. L.A.-Orange County also has the highest volume of potentially distressed (what we call “stressed”) real estate at $4.5 billion. Manhattan has the second highest level with $4 billion.

South Florida has $996 in distressed real estate value per capita, the largest amount per capita after Manhattan, which has $2,455. Houston has the lowest amount among the markets we track, at $147 per capita. Houston also had the largest increase since October 2011, growing from $111 to $147 per capita, or 32.4 percent.

Washington and Baltimore

Of the 10 markets we track, the Washington area has the fourth-lowest level overall of distressed assets (excluding stressed) at $1.6 billion, while Baltimore has the lowest, at $430 million. Stressed assets are much higher in Washington, at $3.7 billion, third-highest among the 10 surveyed cities. Distressed real estate per capita is $289 per person for the Washington area, which is fourth-lowest among the 10 markets, while Baltimore has $157 per capita, which is the second-lowest of the 10 cities surveyed.

Opportunities to snap up distressed assets in the region have been limited. Washington’s assets have largely been held by strong, institutional ownership, and have benefited from the region’s steady economic performance and employment growth.

Mike Donnelly is a senior associate at Delta Associates. Staff at Delta Associates contributed to this article. For more information, please visit www.deltaassociates.com.