Commercial real estate is the "second shoe" to drop in hurting the economy, Daniel Tishman, chairman and CEO of the Tishman Construction Corporation told CNBC.
"We're getting through the single housing real estate market OK but the numbers involved in commercial real estate in all sectors are staggering," Tishman said. "Trillions of dollars are involved in commercial loans. The roll over of those loans in the next 5-7 years is going to happen and the money just isn't there for refinancing."
Tishman, whose company is one of the oldest construction firms in the US, said the industry needs government help.
"The TALF (Trouble Asset Loan Facility) program is about to end and it needs to be extended," Tishman said. "The government needs to come up with some creative programs to help out the industry."
Tishman said there's a total amount of $3.4 trillion in commercial loans that needs refinancing, and many local banks are holding those loans.
"I think they (banks) are very exposed," said Tishman. "There are huge numbers of banks that could have problems (and face closings) going forward because of carrying these commercial loans."
Tishman said REITs, or real estate investment trusts, are not in as much trouble.
"Most of the current REITs are doing well," said Tishman. "They own a lot of the commercial loans but they have the ability to raise money. That will help them defer any losses."
Tishman said the commercial real estate bubble was created by an over-eagerness of lending.
"One property being acquired and then being lent on and lent, created this," said Tishman. "Multiple levels of returns were required and that caused the problem. I don't see values for commercial real estate coming back for two to three years."
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