Another Potential Systemic Failure

CRE's about to blow.

From apartments to shopping malls, office towers to dockyard industrial space, the commercial real estate market will be marked by rising vacancy rates and weak to no rent growth. And the choke hold on credit could push many property owners that need to refinance into foreclosure.

Nearly 40 percent of real estate investors need to refinance part of their portfolios this year, according to more than 1,100 investors surveyed in October by Marcus & Millichap Real Estate Investment Services and National Real Estate Investor magazine. The investors also expect prices to decline 15 percent on average this year.

"It's hard to be an optimist right now," said Dan Fasulo, managing director of research firm Real Capital Analytics. "We're at the point where there's another potential systemic failure that the industry is trying to avoid."