by Calculated Risk on 4/28/2009 09:23:00 PM

From the Financial Times: Commercial mortgages at risk

“Commercial real estate is in a world of hurt and will be for at least the next two years,” said Ross Smotrich, analyst at Barclays Capital. “This is a capital intensive business in which lending capacity has diminished because of the absence of securitisation, while the fundamentals are driven by the overall economy so both occupancy and rents are declining.”

... At the end of the first quarter, defaults and payments more than 60 days late were at 1.53 per cent of outstanding mortgages. Fitch said they could reach 4 per cent by the end of 2010.

Rising vacancy rates and falling rents ... not the best fundamentals. The story is the same for retail, multi-family, industrial, and hotels. CRE: A world of hurt.