Questions surround commercial real estate market’s impact

An extended decline in the commercial real estate market could spur more unemployment and wreak havoc on local banks, Fortune senior writer Colin Barr said in a CNNMoney segment. The question remains, he said, how steep the price declines in the commercial market will be in the next year. “There’s no financing available. A couple years ago it was possible to get big loans… and now it’s very difficult to get any financing above $15, $20, $25 million,” Barr said. This trend could have a devastating effect on building owners, as many large commercial properties need to refinance frequently. Barr said that the government is promoting Term Asset-Backed Securities Loan Facility for this reason — a lot of commercial real estate financing comes from securitization markets which remain frozen, for the most part.