The second, third, or maybe Nth shoe to fall in the ongoing real estate crisis is commercial real estate -- offices, factories and to a certain extent rental apartments -- which tend to trail the owner-occupied housing market as leases end, jobs are lost, and businesses close (or recover). Alas, commercial real estate couldn't be much worse, according to a new report the commercial property research firm Trepp LLC.
Delinquencies on commercial-mortgage backed securities rose to 6.07 percent in December, from 5.65 percent in November and 1.21 percent one year ago. This is the highest delinquency rate ever recorded. The total value of the commercial mortgage-backed securities market was $724.5 billion in 2009. This is significantly smaller than the $5+ trillion market for securities backed by home mortgages, but $700+ billion is still a significant exposure for the U. S. economy and one that is going down, not up.