Commercial property values have fallen 42% from their peak in 2007 and there are roughly $1 trillion in underwater commercial real estate (CRE) loans maturing the next few years that could be difficult to refinance, according to a new report from Trepp.

Of the $1 trillion in loans maturing between this year and 2015, $270 billion are under water by 10% to 20%, with another $250 billion under water by more than 20%.

"We remain concerned about the volume of under water mortgages that will mature over the next several years," said Matthew Anderson, a managing director at Foresight Analytics, a Trepp subsidiary.

"Continued high demand for refinancing from loans originated during the commercial real estate boom will constrain real growth in the commercial mortgage market over the next decade," Anderson testified before a congressional Troubled Asset Relief Program or TARP oversight panel on Friday.

Trepp estimates that commercial mortgage debt increased by $1.8 trillion between 2000 and 2007, doubling the size of the market. As of Sept. 30, banks held nearly $1.7 trillion of CRE loans, including $400 billion of construction and development loans.

Over the past three years, depositories charged-off $97 billion of CRE loans, Anderson told the Congressional Oversight Panel. He said the 42% drop in commercial property values is larger than the decline suffered during the early 1990s in the wake of the S&L crisis, and is on par "with our estimates of the decline during the [Great] Depression."

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