Is the Commercial Real Estate Market a Ticking Time Bomb?

Commercial real estate loans generally have provisions which require borrowers to pay off their loans or refinance them by a certain date which typically is within 5 or 10 years of initial funds disbursement. By 2013, $1.3 trillion in real estate loans will be due from property borrows such as for offices, hotel, shopping centers, multifamily homes, self-storage and industrial properties. Nearly half of the maturing multifamily and commercial debt will not qualify for refinancing according to Deutsche Bank, which means that two-thirds of CMBS debt will no longer be qualified or eligible to refinance. This will result in losses of over $50 billion dollars in securitized commercial loans and $200 billion dollars on commercial real estate loans, which will, again, effects commercial real estate financing.