"I don't think that this crisis has even hit the commercial market yet," he says. "When you consider all the securitized debt floating around out there on the commercial side, and the typical two- to four-year terms, all this debt that has put on the books in '03, '04, '05, '06 and '07 hasn't rolled yet. All that debt is going to be coming due, and that debt went pretty deep into the capital stack on very inflated pricing."
He adds, "The Fed is focused on the residential side, but they aren't saying anything about commercial. There's some potentially scary stuff out there with the commercial mortgage debt."
One worry: "Cap rates are going up," Pappas says. Pappas notes that people need to come to realistic terms on the pricing of property. "Everybody is saying this is a liquidity crisis," he says. "This isn't a liquidity issue it's a pricing issue."
Recommended For You
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
