We have an enormous crisis looming in commercial real estate, because, unlike home ownership, these loans are typically for a short period, 5 years typically, and at the end of the term, you need to refinance, and right now, the property owners are under water:

Thousands of commercial mortgages valued at hundreds of billions of dollars are approaching their renewal dates, and by some estimates, two out of three no longer will meet the original loan conditions and won’t be able to refinance. With prices for commercial properties expected to plunge, a vicious cycle could unfold, much as it has in the nation’s housing market.

The interesting thing here is that hese mortgages could be modified by a bankruptcy judge (cram down), they are performing loans, and it’s where the sensible banks did their business, which means that they will get hammered.

I see another government bailout.