Commercial Real Estate Outlook Sours for Banks

This story originally posted on RealMoney.com on Feb. 9. For more information about subscribing to RealMoney, please click here.

For many large banks, exposure to souring commercial real estate and construction loans began to reach alarming levels during the fourth quarter of 2008.

Moody's Investors Service announced Thursday it was reviewing $303 billion in commercial-mortgage backed-securities, saying commercial property prices were likely to decline over the next two years. But that outcome should not be at all surprising, considering that a commercial real estate swoon was a logical follow-up to the housing crisis and expected recession. ...