A massive U.S. commercial real estate crash is in its beginning stages, billionaire Wilbur Ross said today. The WL Ross & Co. CEO, who is also working on a government program to rid banks of their toxic assets, said he is practicing extreme caution on the commercial real estate investments front, especially with regard to office spaces, which are rapidly shedding tenants. Though the Public-Private Investment Program has made $1.5 billion in pooled government and private funds available to his company for purchasing banks’ distressed assets, Ross said he had used less than $100 million of those funds by Oct. 15, and that the money he spent went toward residential mortgage-backed securities rather than commercial properties. Earlier this month, WL Ross, along with several other firms led by Starwood Capital Group and TPG, agreed to buy $4.5 billion in real estate from the seized Corus Bankshares, after the bank’s investments in construction loans for condominiums went sour. [Bloomberg]

The Treasury Department will match $1.94 billion in investments from BlackRock, Willington Management and AllianceBernstein as part of the Public Private Investment Program, in which the government plans to partner with private firms to purchase toxic real estate assets. Yesterday’s announcement comes on the heels of the commitment of $1.13 billion by two other firms last week, which, combined with the debt financing promised by the Treasury, brings the purchasing power of the five funds to $12.27 billion.