Long before Keystone Property Group was a big Center City commercial landlord with historic properties such as the Curtis Center, it was a scrappy suburban upstart, snapping up buildings in office parks and rehabbing them to command higher rents.

That past has come back to haunt the 29-year-old Conshohocken-based company. As companies move to relinquish office space because of the coronavirus pandemic, they are disproportionally vacating buildings at the market’s lower end. That’s hastening what had been a gradual shift by office tenants toward Center City away from the suburbs, where that lower-end real estate is located.

It’s too early to say whether the suburbs will continue losing out to Center City through the health crisis, with some experts saying that concerns about working and commuting in dense urban areas during the pandemic could hurt their allure.

But so far that’s not reflected in new data on debt against Philadelphia-area commercial real estate held by Wall Street investors, which suggests that lenders are especially skittish over the repayment prospects of suburban office buildings, relative to ones in Center City. That spells trouble for Keystone, which still has lots of suburban properties on its books.

The vast majority — 83% — of the region’s investor-held debt against offices that’s either delinquent or being “watch-listed” for potential default is located outside the city itself, according to an Inquirer analysis of data compiled by commercial loan specialists Cred IQ.

Debt against Keystone’s properties alone accounts for more than a third of that $504 million in distressed office debt, which is itself up 42% from March, when the pandemic began to drive down the economy, the analysis shows.

Keystone said in a statement that the watch-lists “contain inaccurate reporting and mathematical inaccuracies which have since been contested and corrected.” Its suburban properties are 90% occupied, and 98% of its tenants have continued paying rent through the pandemic, it said.

“They’re smart guys [and] they’re good developers,” Philadelphia commercial property consultant Bill Luff of CRE Visions LLC said of Keystone. “But a lot of their initial portfolio was geared toward smaller tenants in emerging, suburban assets, and those are the ones that have been most negatively impacted by the pandemic.”

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The data reveal just a portion of the region’s full tally of mortgages that could be headed for trouble because they reflect only the performance of the investor-held debt, known as commercial mortgage-backed securities, for which there are public disclosure requirements.

No such requirements exist for loans that are privately held by banks or other financial institutions, which make up more than half of mortgages nationwide, according to a calculation by the Securities Industry and Financial Markets Association, a trade group.

Cred IQ, based in Radnor, reported a total of $3.4 billion in distressed debt across all property types throughout the region, which includes Philadelphia, Montgomery, Delaware, Bucks, and Chester Counties; Camden, Burlington, and Gloucester Counties in New Jersey; and New Castle County in Delaware. That was a tripling from under $1 billion in March.

The sectors seeing the most trouble are hotels, which backed $648.5 million of the region’s distressed debt in July (up more than seven times from March), and retail properties, which backed $1.12 billion of the troubled debt (up more than six times).

With many white-collar employees able to keep working through the pandemic, office tenants have largely been able to meet their rent obligations — even if remote work is leaving unused much of the space the firm pays for — so fewer office loans are seeing distress.

But as the health crisis continues, office landlords are feeling some pain, as economic troubles filter more fully into the corporate world and companies cut back on space.

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And although Keystone is the single biggest holder of distressed office debt in the suburbs, it’s far from the only one.

In Newtown, for example, the $11.9 million owed against the 41 University Dr. office building, part of the Silver Lake Executive Campus, was watch-listed in April. Its owner, Pitcairn Properties, did not respond to a message.

Even before the coronavirus, demand for suburban office space had been weakening, as employers set up shop in cities to tap their population of tech-savvy young college graduates who are needed for increasingly knowledge-intensive industries.

Last year, central Philadelphia gained about 460,00 square feet in new office leases, an increase of nearly 260% over 2015, according to data from commercial real estate firm Colliers International. In surrounding suburban Pennsylvania counties during that time, net new leases fell by 91%, to 139,000 square feet from 1.47 million square feet.

Rents have tracked that shift: Over the three months that ended on June 30, office space was renting for an average of $34 a square foot in central Philadelphia, up almost 22% from five years earlier, far outpacing the 10% increase to $27.28 in the Pennsylvania suburbs, according to Colliers.

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Part of the reason for Center City’s higher rents is its greater proportion of new, well-appointed office buildings, according to the CoStar Group, a market tracker.

About half of Philadelphia’s office space has four or five “stars” under CoStar’s rating system, which is based on a building’s design, management, maintenance standards, and other criteria. In surrounding Pennsylvania suburbs, just a little more than a quarter of office space has those ratings, while in South Jersey, just 17% does.

With demand now weakening throughout the market because of the health crisis, it’s those less desirable buildings that are having the hardest time staying filled, said Adrian Ponsen, a Philadelphia-based analyst with CoStar.

“With leasing down sharply across the entire market, distress is surfacing first among properties that struggled to attract tenant interest even before COVID-19 came into the picture: older office parks in the far outlying suburbs,” he said. “Not Center City.”

Keystone said it does not expect that trend to continue.

“Our suburban assets have performed strongly amidst the unprecedented climate of economic uncertainty,” it said. “As the office market continues to rebound from the initial shock of the pandemic, leasing trends increasingly support the growth of the suburbs.”

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There are few signs of trouble so far at Keystone’s Center City properties, which include One Washington Square, the massive three-tower complex that forms a backdrop to Independence Hall, in addition to the Curtis Center across from Washington Square Park and the former Dow Chemical building at Sixth and Market Streets.

The Dow building — still best known to many by the name of its original main occupant, Rohm & Haas Co. — is being readied for a new anchor tenant, Macquarie Investment Management, in a deal that has emblazoned the multinational finance firm’s logo across its roofline.

The Curtis Center, meanwhile, has attracted such new tenants as Imvax, a growing biotech company cofounded by Thomas Jefferson University researchers, for which a section of the historic building has been converted to lab space, a property type that has continued to see strong demand and is insulated from trends toward working from home.

There are bright spots for Keystone in the suburbs, as well.

In Conshohocken, the company is nearing completion of its first ground-up building, a $325 million project known as Sora West, which will be a new headquarters for AmerisourceBergen after it consolidates staff there from the Chesterbrook Corporate Center in Wayne and elsewhere in Conshohocken.

But things are looking less upbeat for Keystone in other parts of the suburbs, where even before the pandemic, at least $81.9 million in debt backed by three of its properties had been on watch-lists, according to the analysis of Cred IQ data.

They included the Corporate Center at Moorestown, which was placed on a shaky footing by the bankruptcy filing late last year of Destination Maternity Corp., a major tenant, and the One Presidential building near City Avenue and the Schuylkill Expressway in Bala Cynwyd, which is on the verge of losing investment-manager Hamilton Lane as a tenant.

Keystone’s troubles have intensified in the coronavirus economy, with $113.8 million more debt against an additional four properties tagged as delinquent or watch-listed since early May, according to Cred IQ.

One of its distressed loans is the $7.2 million that it owes against its 950 Haverford Rd. office building in Bryn Mawr, which was placed on watch-list after Keystone asked for forbearance on that debt “due to loss of revenue from tenants being unable to work due to pandemic-related shutdowns.”

The $24.7 million backed by the Corporate Center at Moorestown has since the start of the pandemic fallen into delinquency in connection with the health crisis, according to the Cred IQ records. The loan is being reviewed for transfer to a “special servicer,” whose job it is to recover as much money from the distressed property as possible for investors.

Still, said Keystone, “We are bullish on the future prospects of this segment of our portfolio.”