Today, our series on America’s economic crisis continues by focusing on the next wave of real estate challenges: commercial properties.

http://www.time.com/time/business/article/0,8599,1893125,00.html

As the article above notes, we are facing a “ticking time bomb.” Why?  Because some $1.3 trillion in mortgage loans to commercial properties will come due between now and 2013.  Deutsche Bank estimates that some 50% of these loans won’t qualify for re-financing. And when the owners inevitably default, it could lead to losses of at least $200 billion.  That’s billion with a “b”.

How are we poised for another real estate disaster?

Here is how.  The way the mortgage market for commercial real estate works is this: they are structured as 5-to-10-year loans, after which re-financing takes place. But since property values have dropped, owners will not be well-positioned for re-financing.

And keep in mind that the height of the mortgage boom took place from 2004-2007. Many of the commercial real estate mortgages created during this time were set with trigger interest rates that will begin to accelerate at 36 to 60 months from the date of the loan’s closing. I’m no math expert but that tells me we’re not out of the woods yet. With fuel prices going back up, and a potential commercial real estate collapse combining with the ongoing residential real estate crisis, we could soon hit the trifecta of economic crises.

If any of you are thinking about buying a new house, ranch or commercial property, hold on! I think things are going to get real cheap. And as we all know “cash again is going to be king.”