Bloomberg reported  Josef Ackermann, chief executive officer of Deutsche Bank AG concerns over the state of commercial real estate.  “Commercial real estate was a bright spot in the economy, serving as a buffer against the declining housing market.”  New York University economist Nouriel Roubini thinks there are reasons for concern.  He believes we might be on the verge of a “Double-Bubble Crisis”.  His thinking goes follows the line of commercial real estate needing a strong housing market because of its relationship to to retail.  Additionally, if the economy continues to goes south companies will not be expanding and their need for office and industrial space will decreases.  Easy credit in previous years probably funded transactions which may not survive the economic downturn.

Commercial real estate tends to lag behind housing trends which is in crisis.   Investment in nonresidential structures declined 6.2 percent in the first quarter of 2008.  “It is quite possible that the tighter credit conditions and economic slowdown has barely started to filter through,” Merrill Lynch & Co. economists Sheryl King and David A. Rosenberg recently wrote.