Commercial Real Estate Crash Hitting

With commercial mortgage delinquencies hitting an 11-Year High, (H/TCalculated Risk) the records only going back 11 years, we are starting to see what might very well be a worse crash in commercial real estate than we saw in housing, because typically, CRE mortgages need to be refinanced every 5 years.

Additionally, we have a report from Deutsche Ban suggesting that ²/₃ of loans backed by mortgage backed securities (CMBS) will not be able to be financed if they come due between now and 2018.

While CMBS are only about ¼ of this market, it's not unreasonable to assume that we could see similar numbers in the same range for other forms of financing, as the property remains under water.

Even if that number is only 20-30% of outstanding commercial markets, we are looking at a death spiral that will make the housing bubble pop look tame.