Commercial real estate: some improvement, but turbulence ahead

Recent trends are mixed. Values and sales bottomed in 2009 (charts 1 and 3 below), but vacancies are high (chart 2) and commercial mortgage-backed securities lending, while improving, is still weak (chart 4). “Extend and pretend” is the order of the day at commercial banks, which are digesting $80 billion of losses on commercial real estate loans, and the real challenge is still ahead: $1.6 trillion of commercial real estate loans are coming due in the next eight years.

See Commercial real estate coming back, but unevenly –